Deal summary

Interfloor is Europe’s largest manufacturer of underlay and accessories for the flooring market. It manufactures the leading brands Tredaire, Duralay, Gripperrods and Stikatak. From its base in Lancashire, Interfloor sells to national and independent retailers, distributors and contractors and exports to over 70 countries. Employing some 300 people, annual turnover has grown to around £70 million.

The business had been owned by a private equity fund and the management team for ten years and Catalyst initially advised on a refinancing transaction, introducing a unitranche facility from Crescent Capital. With the refinancing providing a solid platform and the business experiencing good growth, the shareholders decided to explore their exit options. Catalyst undertook a strategic review of the business which led to the shareholders pursuing a dual track sales process, exploring trade sale options in parallel with a potential initial public offering (IPO) of the business.

Initially, the IPO route looked favourable and progress was made towards this outcome. However, through our industry contacts Victoria PLC were approached and the board of Victoria quickly expressed a desire to acquire Interfloor.

Given the volatility in the equity markets, the shareholders decided to pursue the sale to Victoria in parallel with the IPO process.

What difference did we make?

It was important to the shareholders that the IPO process carried on running to its original timetable. This meant there was less than four weeks in which to get Victoria the information they needed to make an informed offer and then execute a sale process. However, our knowledge of the business allowed us to pull together within a week a concise but in-depth information document covering the key issues. This document enabled Victoria to submit a board approved bid within a further week.

After an intensive weekend of negotiations, heads of terms were agreed which, as well as value, secured for the shareholders very attractive terms by ensuring they would not be put in a weaker legal position post completion (e.g. in respect of warranties) than if they had completed the IPO.

A brief period of due diligence followed during which commercially sensitive information was disclosed in a controlled manner to protect the business in the event the deal did not complete.

The deal closed successfully on the agreed terms ahead of the due IPO date. It has given the company and the employees a strategic and supportive owner capable of developing the business in a more favourable environment than independent public market ownership.

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What our client said
"Catalyst's professionalism, consistency and calm approach assisted a smooth transaction. It was a pleasure to work with their team." Phil Reeder, Executive Chairman