The proprietor of Silentnight, one in all Britain’s greatest mattress producers, is getting ready to finish a controversial 14-year tenure which included settlements with regulators price tens of thousands and thousands of kilos.
Metropolis sources estimated on Monday that the corporate could possibly be price within the area of £100m.
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A deal is unlikely to be concluded with a purchaser till subsequent yr.
When the sale does happen, it is going to finish HIG’s affiliation with an organization which discovered itself on the centre of one of the vital contentious non-public fairness offers within the UK for many years.
HIG Europe, which specialises in shopping for mid-sized firms, acquired Silentnight after figuring out a possibility to generate a good-looking return if it might strike a deal with out the bed-maker’s pension liabilities.
The non-public fairness group purchased a piece of Silentnight’s money owed, put in place new restrictions on its borrowing amenities after which compelled it right into a restructuring course of.
As a consequence of the following money crunch, KPMG, the accountancy agency, put Silentnight into administration and instantly bought its property to HIG Europe with out its pension scheme.
The deal triggered an investigation by The Pensions Regulator, which used its anti-avoidance powers to pursue the buyout agency for substantial compensation.
The watchdog issued two warning notices, in 2014 and 2016, with HIG Europe looking for a judicial evaluate of the latter.
Its request was rejected, and in 2021 it agreed a £25m settlement with the pensions watchdog.
Though these funds had been injected into Silentnight’s pension scheme, the injection was not adequate to stop its duty for paying pensioners being transferred into the Pension Safety Fund, the industry-funded lifeboat.
“Our case was that HIG used the control that was available under the lending facilities to bring about the unnecessary insolvency of otherwise viable companies that were supporting a [defined benefit] pension scheme,” TPR mentioned on the time of the settlement.
“We would not expect lenders to bring about unnecessary insolvencies, and so we would not ordinarily anticipate targeting them with our powers.
“Nonetheless, we will likely be alert to any occasion the place we consider an pointless insolvency is caused to sever a scheme from its employer and can pursue these circumstances to applicable outcomes in accordance with our statutory targets.”
HIG Europe was not the one celebration which was hit within the pocket over its conduct in relation to Silentnight.
In 2021, KPMG was fined almost £13m by the Monetary Reporting Council – on the time a near-record sum – for its position in facilitating the mattress producer’s pre-pack sale to HIG Europe.
An FRC tribunal additionally fined the KPMG associate who led the deal, David Costley-Wooden, and banned him from holding membership of the accountants’ skilled physique for 13 years.
KPMG’s restructuring arm within the UK was bought – additionally in 2021 – to HIG Europe, and rebranded as Interpath Advisory.
The non-public fairness agency is now within the strategy of initiating a sale course of for the enterprise which might worth it at about £800m.
A spokesperson for HIG Europe declined to touch upon the appointment of bankers.
