2010 | Consumer, Leisure and Retail Services
Advised
on its sale to
Overview of Transaction:
On September 10, 2010, Linen Holdings, LLC, a Harbor Linen, LLC affiliate (“Harbor Linen”), acquired substantially all the assets of TY Group, LLC (“TY Group”), as well as the shares of certain TY Group Latin American affiliates in Mexico, Panama and the Dominican Republic, from TY Group’s shareholders
TY Group designs, manufactures and distributes bathrobes, towels, linens and amenities, including soaps, shampoos and lotions, for the high-end and luxury hospitality industry in North, Central and South America including the Caribbean. Founded in 1995 and based in Miami, FL, TY Group clients include some of the largest, most prestigious hotel chains and cruise lines in the country such as Marriott, Hilton, Hyatt, Intercontinental and Carnival Cruises
Harbor Linen is a high service supplier of bath, bed and table linens and other textile products primarily on a replacement basis to small and mid-sized U.S. accounts in the hospitality, healthcare, government and school sectors. In 2008, Harbor Linen was majority acquired by Capital Partners, Inc. (“Capital Partners”), a middle-market private equity firm based in Greenwich, CT.
Strategic Rationale:
Complimentary Customer Base and Product Offering: TY Group was a leading player in the high-end and luxury hospitality industry with a loyal blue-chip customer roster (including Marriott, Hilton, Intercontinental, Hard Rock and Carnival Cruises). In addition to bathrobes, towels and linens, TY Group diversified into the amenities market (soaps, shampoos and lotions), a high-growth, high margin business
International Expansion: TY Group had a growing and established presence in certain key hospitality markets in Latin America and the Caribbean (Mexico, Panama and DR), presenting a compelling growth opportunity
Strong Leadership: TY Group founder/CEO Danny Tuaty and his team represented a young, dynamic and talented management team
Cobaltum Role / Results
Cobaltum acted as the exclusive strategic and financial advisor to TY Group and its shareholders
Cobaltum managed the entire sales process, from initial unsolicited discussions and negotiations to buyer due diligence, documentation and closing. This was a long and complex process due to a number of factors such as the 2009 financial crisis, competitive concerns, earn-out and equity rollover negotiations, and multi-country jurisdictions, to name a few. Through it all, Cobaltum was instrumental in keeping all sides at the table and managing the process to a successful closing
Cobaltum negotiated attractive terms for TY Group shareholders (terms not disclosed) that included a majority (75%) cash upfront component, along with an earn-out and a substantial equity rollover; Cobaltum was a particularly strong advocate of the latter despite sellers’ reservations
On June 1, 2012, Bed, Bath & Beyond (NASDAQ:BBBY) announced that it had acquired Linen Holdings, LLC for $105 million in cash. As a result of this transaction, TY Group shareholders achieved 100% of their earn-out and, most importantly, monetized and doubled the value of their retained equity in a little more than 18 months