PRIVATE EQUITY
STRUCTURED CAPITAL

CASE STUDIES

Industry Vertical
Manufacturing & Distribution
Headquarters
Essen, Germany

www.coveright.com

Coveright Surfaces Holding GmbH

  • Business

    Coveright Surfaces Holding GmbH (“Coveright”) was a leading global supplier of surfacing materials for applications in the furniture, flooring, woodworking and automotive industries. The company conducted manufacturing activities in Brazil, Canada, Germany, Spain and the United States, with a worldwide sales presence.

  • Situation

    Harvest received an early call from the sell-side advisor, who identified us as a well-qualified buyer because of our relevant investment experience. Harvest differentiated itself in the sale process by partnering with Deutsche Beteiligungs AG (“DBAG”), a German buyout firm. The Harvest / DBAG partnership was attractive to management because Coveright’s main operations were in North America and Europe and management wanted experienced, multinational financial partners. Because Coveright was a corporate carveout from AkzoNobel, the transaction was complicated and due diligence took several months.

  • Harvest Partners Investment

    In June 2003, Harvest and DBAG purchased Coveright with the existing management team. To fund the acquisition Harvest and DBAG arranged the debt financing, which was comprised of a senior credit facility.

  • Investment Thesis

    • Market leading position, with an approximate 25% share of the global non-captive producer market
    • Favorable product trends
    • Strong global market for product
    • Cost reduction opportunity through manufacturing plant rationalization
  • Value Creation

    • Revenue growth and market share gains from new products
    • Profit improvements from implementation of operational restructuring Program
    • Strengthen management team and Board of Directors
  • Outcome

    • Completed a dividend recapitalization in May 2006
    • Sold assets to strategic buyers in 2012 and 2013