KPS to triple its money with American & Efird sale

KPS Capital Partners stands to triple its money with the sale of American & Efird Inc, a source said.

Platinum Equity said Feb. 26, it would buy American & Efird. Terms weren’t disclosed. Founded in 1891, American & Efird makes and distributes industrial and consumer sewing thread, embroidery thread and technical textiles. The Mount Holly, North Carolina, company employs 10,000.

American & Efird’s thread is used by companies that produce apparel, automotive components, home furnishings and medical supplies, Platinum said. The sale is expected to close in Q2.

The American & Efird deal dates to 2011 when KPS acquired the company from Ruddick Corp for $180 million. In 2014, American & Efird bought substantially all of Gutermann’s global industrial and consumer thread business. Gutermann, Gutach, Germany, makes sewing thread products for consumer and industrial applications.

American & Efird in 2016 also acquired a majority of Vardhman Yarns and Threads from its joint-venture partner, Vardhman Textiles Ltd. Vardhman was India’s second-largest producer and distributor of industrial and consumer sewing thread.

KPS got some of its money back in a 2015 recap. At the time, American & Efird raised about $275 million in loans that it used to refinance debt outstanding, as well as to fund an $80 million cash distribution to stockholders and support the company’s continued growth, a statement said.

The New York buyout firm invests in sectors including basic materials, branded consumer, healthcare as well as luxury products, automotive parts, capital equipment and general manufacturing. In 2013, KPS Special Situations Fund IV closed on $3.57 billion, PitchBook said. KPS’s prior fund collected $1.2 billion in 2007, Buyouts said.

For Platinum, the deal is the latest for the Los Angeles private equity firm. The firm, founded by Tom Gores, targets investments in underperforming and undermanaged companies. It looks at corporate divestitures, special situations, public-to-private transactions and restructurings. This month, Platinum agreed to buy Wyndham’s European vacation rental business for $1.3 billion, while also closing its investment in WS Packaging Group.

Platinum is launching its debut small-cap fund, targeting $1 billion to invest in companies with less than $450 million of revenue, Buyouts reported.

American & Efird and Platinum could not immediately be reached for comment.

Action Item: To contact Les Miller, CEO of American & Efird, call him at (704) 827-4311

Photo of American & Efird industrial threads sourced from company website.