Background  

• Nybron Flooring International Group (“NFI Group”) is the leading European producer of wood flooring, and a world market leader in pre-finished engineered wooden flooring. The NFI Group is comprised of three principal subsidiaries, operating under separate, internationally recognised premium brands: Kährs, Bauwerk and Marty
• Since its acquisition by investment firm Vestar Capital in 2006, trading performance has been impacted by increasing raw material costs, new import and export duties as well as adverse currency movements
• Nybron’s debt facilities of €450m comprised of Senior, Second Lien and Mezzanine. As financial performance deteriorated, negotiations began with lenders around potential restructuring solutions

Process

• Close Brothers was appointed to advise the NFI Group on three key aspects of the restructuring transaction:

 - A valuation was undertaken in November 2007 to form a framework for restructuring negotiations

 - An accelerated sell-side M&A process was launched to assess whether greater value could be generated for stakeholders through a disposal of the business. A select number of key international strategic and financial buyers were approached, their interest qualified and a subset taken through the sale process

 - A second valuation process was undertaken in March 2008 to facilitate the debt being exchanged for equity as part of the final restructuring process

Gains 

• The valuation was performed in an extremely tight timeframe to provide the Board with an independent opinion to facilitate the restructuring negotiations. The conclusions set a benchmark for the company to enter into negotiations with creditors
• The accelerated M&A process attracted several bids, however, these were deemed insufficient to alter the course of negotiations. The process nevertheless provided comfort to the Board and stakeholders that the values received underpinned our valuation and that the correct course of action was being undertaken
• The advice provided throughout the process contributed to the final execution of the restructuring plan in March 2008, which provided for the significant equitisation of debt and a substantial de-leveraging of the balance sheet to provide a stable platform for the business going forward

For more information regarding the transaction, please contact Matthew Prest, Andrew Cunningham, Charles Noel-Johnson, David Wardrop, Daniel Gibney or Harry Kalmanowicz on +44 (0)20 7655 3100.