Oct 22 2009
Empire Investment Holdings ("Empire"), a private investment firm, announced today that its portfolio company, Polyester Fibers, has completed the carve-out process from Leggett & Platt ("L&P"). Empire and L&P entered into a twelve (12) month transition services agreement, which included services related to accounting, treasury, logistics, IT, global services and the use of L&P's manufacturing resource planning (MRP) and financial application. It is common for Empire to acquire businesses that lack certain essential elements that form a standalone enterprise.
A critical component to assessing this acquisition was an understanding of the various limitations resulting from an incomplete management team and the lack of a comprehensive operational infrastructure. Since the closing, Polyester Fibers' business has maintained continuity, without any disruption to customer service or the delivery of its products worldwide.
"Our team has completed this complex extraction from the L&P platform two months ahead of schedule," said David F. Alfonso, Empire Investment Holdings' chairman and chief executive officer. "Through the course of the due diligence process, we were able to see beyond the challenges related to this extensive carve-out and identified significant opportunities to unlock value."
"It was a pleasure to work with Empire through the transition process," said Russell Iorio, Leggett & Platt's vice president - mergers & acquisitions. "Empire was very thorough in their preparation before the divestiture closed, which resulted in a smooth transition of the business post closing. Additionally, Empire met its timetable to transition to its own G&A services from Leggett & Platt's corporate services, which was important to us."
Immediately post close, Empire deployed its full fledged operational transition team to the acquired units' multiple locations, with the focus on enhancing executive leadership, improving operational efficiencies, achieving strategic growth and creating a standalone infrastructure. The overall transition and carve-out process lasted approximately ten (10) months. During this time, Empire stabilized the customer and employee bases, while increasing market share during unprecedented economic times for not only Polyester Fibers, but for its customers and vendors as well.
"This acquisition fit perfectly with Empire's investment profile and now represents a flagship enterprise for our firm," said Alfonso. "It boasts an expansive manufacturing footprint and distribution model that delivers well known brands to a mature and established customer base."