Established in 1947, Texon is the world’s leading manufacturer of structural footwear components and materials. Their non-woven and cellulose based-products are used in over 500 million new pairs of shoes produced each year and it is a specified and approved partner of many of the world’s leading footwear brands.
Headquartered in Hong Kong with key production facilities in the UK, Germany and China, Texon distributes to factory customers in over 90 countries. It also provides local technical support and training to customers.
In 2010, Barclays Ventures (Barclays) assumed majority control of the business as a result of a restructuring. Since then, Barclays and the management team, led by CEO Stan Lamb, have undertaken numerous operational improvements, grown market share and invested in researching and developing exciting, new product innovations.
With an increasing focus on future revenue growth and potential acquisitions, the shareholders agreed that it was appropriate for the business to find a new partner to support Texon in its next phase of development.
At the outset, the shareholders sought an adviser who could deploy experienced professionals in the UK and Asia. Our demonstration of a long track record delivering cross-border transactions with our international partners was key to our appointment.
What difference did we make?
At the outset, we undertook a comprehensive strategic exit review which included an in depth assessment of trade buyer appetite in Europe, the US and Asia. This included screening a number of buyers in Taiwan, Japan and China using the local language expertise of our Singapore-based partner.
Our strategic review also identified a number of preparing for sale actions. This included us supporting management to develop their business plan and financial projection models. We were also involved in detailed work alongside other advisers to devise robust negotiating positions in relation to a number of legacy issues including environmental, pension and tax matters.
Given the quality of the asset and management team, some favourable market drivers and a credible growth plan, Texon certainly appeared to represent an attractive financial investment opportunity.
Working with our partner firm, we identified the most likely financial investors and commenced a phase of preparatory work. This included finalising the business plan and completing a comprehensive vendor due diligence programme to facilitate a smooth sale process.
As an integrated team, we were then able to market the business simultaneously to both European and Asian financial investors. A number of interested parties stepped forward with offers. At that point, Navis Capital’s offer stood out on the basis of deliverability, price and strategic fit. Following the award of exclusivity, a significant part of our role was then managing Navis through a complex and thorough confirmatory due diligence phase. We were also extensively involved in negotiating an acceptable basis of sale documentation for Barclays.
The deal was a highly successful exit for the shareholders; one which significantly exceeded their expectations on both price and terms when we were appointed. In Navis, the management team have secured an incoming investor with a long track record of successfully investing and growing businesses based in South-East Asia.