Flushed with Success
August 2007
When Polypipe completed its refinancing recently, it was not only the largest transaction on which Livingstone has ever advised but underlined the value of a strong, lasting relationship and a thorough understanding of the client's business.
The recent buy-out, which was completed “off market”, is the latest development in a relationship with Livingstone that goes back to before 2005, when Polypipe was sold by UK group IMI plc in a £293m management buy-out. Livingstone’s team brought New York-based private equity firm Castle Harlan and incoming CEO David Hall together with senior Polypipe management to acquire the business. The deal has more than lived up to expectations.
“Castle Harlan were very good partners for the business,” says Hall, “and they allowed us to invest quite heavily in manufacturing capacity and capability approving the largest capital expenditure programme in our history, to the value of £26 million, which helped us improve operating and financial performance.”
Almost two years on and Polypipe’s management has completed a secondary buy-out valuing the business at £450m. Alex Sheffield, who led the Livingstone team, explains, “Recognising that Castle Harlan might be willing to consider an exit in 2007, we worked with David and his team to initiate, negotiate and deliver a deal in a very short timeframe. Avoiding a wide auction process, we made a pre-emptive approach to Castle Harlan on behalf of management. There was a window of opportunity where we could deliver a good return to Castle Harlan and secure a larger equity position for management.”
The Livingstone team, which included Kristian Gavan and Jenny Meister, recognised that an integrated finance package could enable management to emerge with a majority equity position. “Bank of Scotland with its expertise, proven track record and certainty of deliverability quickly became the preferred partners.” Sheffield says.
Polypipe’s management appreciated Livingstone’s efforts on the deal. “We couldn’t have done it alone,” Hall says. “We have a close working relationship with Livingstone and because they’re well connected and really know the business they could compile a proper shortlist of potential partners. Crucially, they were able to drive the transaction through to completion in a very short timeframe.”
For further information contact:
Alex Sheffield
T: +44 20 7484 4734
E: sheffield@livingstonepartners.co.uk
