KPMG Deal Advisory was appointed by Pacific Brands to divest the Tontine and Dunlop Flooring businesses by way of a competitive sale process.
KPMG was appointed by Pacific Brands to divest the Tontine and Dunlop Flooring businesses.
KPMG has a long-standing relationship with Pacific Brands and has successfully conducted other mergers and acquisition engagements with the group including the divestment of Brand Collective in 2014.
Pacific Brands Limited (formerly ASX listed) was acquired by Hanes Brands Inc in a public takeover in July 2016. At the time of the acquisition, Hanes Brands Inc announced an intention to divest specific non-core operations of Tontine and Dunlop Flooring.
Tontine is Australia’s largest supplier of pillows, quilts and other bedding accessories. Tontine manufactures circa 5 million pillows annually from a single site in Melbourne. Dunlop Flooring is Australia’s largest supplier of carpet underlay with two manufacturing locations in Australia. The business has also recently expanded into the hard flooring category.
KPMG Deal Advisory demonstrated great skill in executing a highly complex transaction which resulted in the sale of two businesses to separate foreign acquirers. Through their careful management of the timetable and bidder communications and strong negotiation skills, both deals were signed within just 12 hours of each other – enabling us to announce the deals to our staff at the same time. This was an outstanding result for Pacific Brands.
– David Bortolussi
Aligned to make the complex manageable
The transaction was unique because both businesses represented a ‘carve out’ from Pacific Brands (not separate standalone entities), and while both businesses were part of the same operating division within Pacific Brands, there are limited similarities between the businesses, their customers, suppliers, end markets and manufacturing processes – hence, the likelihood of a single buyer acquiring both businesses together was limited.
KPMG conducted a single divestment process where acquirers were presented the opportunity to buy either one or both businesses. Offers were received from bidders interested in both businesses together and each business separately. Ultimately, a transaction involving separate divestment of each business to different buyers presented a better outcome for Pacific Brands.
With careful execution, both transactions were signed within just twelve hours of each other (outside business hours) to allow for a joint announcement to employees of both Tontine and Dunlop Flooring businesses. This timetable also needed to be coordinated with requirements for one acquirer (Victoria PLC) to make a public announcement to the London Stock Exchange.
KPMG’s well-considered deal strategy and careful process execution delivered Pacific Brands with various options for the divestment. Leveraging KPMG’s global network helped identify potential investors for both businesses while careful project management of multiple bidders, cross border experience and negotiation with multiple interested parties ensured a successful outcome for Pacific Brands and Hanes Brands.
In February 2017, Pacific Brands successfully completed its divestment of both Tontine and Dunlop Flooring businesses.