Freshfields Bruckhaus Deringer has helped 3i pump £18.14m of investment capital into the £49m management buyout (MBO) of international home furnishings group SIA. The SIA management team bought the business from a group of investors led by French private equity house Chequers Capital, which previously owned a majority stake.
France-based SIA makes objects for the home, such as silk flowers, vases, tableware, candles and small pieces of furniture. It is active in more than 20 countries. Freshfields is one of 3i's main advisers in France, but for this deal the firm brought in lawyers from most of its European offices, including London.
The deal is a complete exit by the Chequers Capital group of investors who have sold their shares in the business. The 3i group of investors now has the majority stake.
The SIA management team now owns a 30 per cent stake in the company. The remaining 70 per cent of the company is held by 3i and a group of other investors.
“Chequers wanted to sell its shareholding in SIA to concentrate on its core business areas”
Fabrice Cohen, Freshfields Bruckhaus Deringer
Paris-based Freshfields partner Jean-Claude Cotoni led the team acting for 3i. Bruno Cavalie, Luc Pons and Laetitia Scalvino of French firm Racine advised the management team.
Marcus Billam and Vincent Martinaud of Clifford Chance in Paris advised Chequers Capital. The instruction was a consolidation of the Chequers Capital relationship for Clifford Chance. According to Martinaud, the firm has a long-term relationship with the client, but until this deal it had not worked with it for several years.
Freshfields Paris lawyer Fabrice Cohen, who also acted on the deal, said the MBO was effectively a buy-back of the business and a case of history repeating itself. Until the late 1990s, SIA was owned by Electrolux. The management bought it out from Electrolux in 1988 with the help of a major investment from Chequers Capital.
Cohen said: “SIA was owned by Electrolux, which sold it to the management and to Chequers Capital in a leveraged management buyout in 1998. Chequers recently decided it wanted to sell its shareholding in SIA to concentrate on its core business areas.”
Around 40 members of the management team were involved in the buyout, said Cohen. Three main managers – president Kjell Melander, managing director and chief executive officer Johan Nilsson and finance director Gilles Martocq – hold most of the 30 per cent stake.
The buyout was assisted by Bank of Scotland, which underwrote mezzanine and acquisition debts. Norton Rose advised Bank of Scotland, with Paris-based partner Bertrand Pellet leading the team.