Established in 2002, Belfield has grown into one of Europe’s largest and most successful manufacturers and distributors of upholstered furniture, soft furnishings, curtains and accessories, caravan interiors and beds. It supplies most of the UK’s leading high street retailers including John Lewis, M&S, Next and Ikea, as well as a number of online retailers. Belfield also supplies integrated furniture and furnishings solutions to the likes of Center Parcs.
The business has sales of around £150m and employs over 1,200 people across its manufacturing sites in the East Midlands and North Wales, with a wholly owned subsidiary in Romania. Belfield has, by some way, the largest in-house design team in the UK furniture industry, which enables it to provide high quality, design-led solutions at a competitive price for its demanding customer base.
The majority shareholder, and son of the founder, decided it was time to exit and, having demonstrated over our long relationship with the owners our deep understanding of the business, sector knowledge and our track record of delivering deals in the sector, appointed us as advisers to both the shareholders and the management team.
What difference did we make?
We undertook a strategic review of the shareholder’s exit options, covering both trade and private equity opportunities. Our detailed knowledge of the space enabled us to short list the most likely trade acquirers and we engaged with them some six months ahead of the planned exit to enable us to understand the nature of the buyer landscape. It quickly became apparent that there was not a buyer for the whole business and our advice was to seek a financial sponsor who could shape the business for an exit by parts or a full exit over time. Our challenge here was the age bracket of the management team and lack of an obvious CEO successor.
Our engagement was tailored around focusing on a short list of UK financial sponsors who had consistently shown an interest in the business over some time and understood the business and management challenges and opportunities. Our process was designed to create the best opportunity for the sellers, the management, the company and the private equity house; and in that order. As part of this, we used the threat of a wider financial sponsor and debt fund process to encourage pre-emptive interest from financial sponsors that exhibited the most appetite.
From early in our engagement with NorthEdge, they behaved like a highly motivated acquirer and we gave them the opportunity to pre-empt a wider process on the back of a good understanding of the business and management situation. Following a period of negotiation, a relatively complex deal was reached and concluded; no mean feat considering the process spanned the EU referendum with a business that has a material level of supply and manufacturing based in Europe. This was without disclosing confidential information to a wider population.
The deal was very successful for all involved including the new CEO in waiting, who joined a short period before completion. All of the management team have committed to remaining with the business across a range of timeframes to ensure that the new management team have a good handover period to enable the business to go from strength to strength.