Steelite International

Deal summary

Steelite is a world-leading manufacturer and supplier of award-winning tabletop ranges for the international hospitality industry. The business can trace its roots back to 1857 when the first factory supplying hotel porcelain was established in Stoke-on-Trent. Steelite now spans the globe with trading relationships in over 140 countries with the company’s core chinaware products being manufactured at its factory and global headquarters in Stoke-on-Trent.

Following sales growth from £45m to over £100m over the last ten years, and the company achieving record profitability in 2015 with export markets accounting for 85 percent of revenue, the shareholders strategy moved to address the next phase of growth.

What difference did we make?

In 2015 the shareholders approached Catalyst to assess their options to realise value from Steelite. The business’s largest single shareholder was the current CEO, who was UK-based and who had a long history in the industry. Two members of the senior management team also held equity. Key to achieving a successful outcome was a considered and evolving engagement with the three shareholders, each of whom had their own specific objectives. With substantial growth in the North American market and the President of Steelite USA keen to take the business forward, Steelite was very attractive to the US private equity market.

Whilst our options review concluded a deal could be achieved with either a UK financial sponsor or an overseas trade buyer, neither routes were pursued. Instead the benefit of combining a US financial sponsor, who understood the global opportunity of a UK made product, with local geographic proximity to the continuing US-based President of Steelite USA, would meet all shareholder objectives.

In the second half of 2015, the shareholders were approached by PNC Riverarch Capital, the private equity investment arm of the major US retail bank PNC. They demonstrated a strong understanding of the competitive position of the business and the objectives of the shareholders. PNC put forward an offer that valued the future benefits of the business and tabled an important component of the transaction, which was the simultaneous acquisition of Steelite’s fine bone china subsidiary, Royal Crown Derby (“RCD”), by the CEO.

Having a close understanding of the shareholders' objectives and the business, we were instrumental in creating and delivering a very complicated deal structure. The structure included resolving a number of very complicated intercompany issues between Steelite and RCD from continuing inter-trading terms, through restrictive relationships and tax structuring. We also played a key role in supporting PNC Riverarch making its first foray into the UK with a UK-headquartered business and a UK legal and banking environment, which differed considerably from that in the US.

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