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Sun Capital Buys ScS Unit
Distressed UK upholstery retailer sells trading business to PE firm.
July 2, 2008
Sun European Partners, a European investment affiliate of Sun Capital Partners, has acquired the trading subsidiary of UK retail sofa seller ScS Upholstery, whose parent has gone into administration.
The 96-store Sunderland, England-based furniture retailer did not release transaction terms, but noted that the deal involves considerable working capital for the ScS trading unit, which operates as A. Share & Sons Ltd. By going into administration the parent company will work out a plan to resolve its debt problems.
“We now have sufficient liquidity to protect our employees, our customers and our suppliers and secure the future growth of ScS," said Mike Browne, chairman of ScS.
ScS went into administration when its principal lender did not provide a renewed credit facility after the company’s principal credit insurers backed away from ScS. That, in turn, created a significant cash requirement and working capital difficulties for the company’s suppliers.
Paul Daccus, vice president of Sun European Partners, said the firm plans to work with ScS to position it for long term growth while guiding it through “economic headwinds.”
Sun European Capital’s holdings include UK kitchen and bathroom retailer HomeForm Group and lingerie company DBA.
KPMG’s Mark Firmin and Richard Fleming were named joint administrators of London Stock Exchange-traded ScS on Thursday. The company requested that its shares be de-listed on Friday.
ScS said that its shareholders would be unlikely to receive a dividend as a result of administration proceedings.
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