650 jobs at Silentnight secured after buy-out
The future of Silentnight and its 650 Pendle jobs have been secured after the firm was bought out by a private investment company.
The Barnoldswick-based business, which has a further 600 employees across Northern England and Ireland, went into administration after negotiations with the Pension Protection Fund failed.
But HIG Europe, an arm of global private equity investment firm HIG Capital, quickly stepped in and has bought Silentnight’s business interests, including its brands and all other assets.
Two weeks ago, Silentnight had proposed a Company Voluntary Agreement (CVA) to address an unserviceable level of historic debt and a £100 million pension hole.
If the terms had been agreed by creditors, it would have seen suppliers receive 65p in each pound they were owed, and Silentnight make a one-off payment to offload its final salary pension plan.
But a spokesman said despite support from suppliers, employees and HM Revenue and Customs, failed negotiations on Thursday with the Pension Protection Fund, the largest creditor, made it clear that the CVA would be unsuccessful, and the business was therefore forced to file for administration, while continuing talks with a number of potential buyers.
Neal Mernock, chief executive of Silentnight, said: “While we are disappointed that the CVA was not successful, this deal with HIG Europe safeguards the jobs of our 1,250 employees and enables Silentnight to continue its proud history of manufacturing and distributing beds across the UK and Ireland.
“Silentnight is now in a much stronger financial position, with healthy short-term cash flow and the longer-term ability to invest substantially in marketing and product development.
“We move into the next phase of Silentnight’s development with confidence and exciting plans to continue to innovate and grow market share as home to both the UK’s and the world’s biggest bed brands.”
Mark Kelly, partner of HIG European Capital Partners LLP, a UK affiliate of HIG Capital LLC, added: “Silentnight is a strong, profitable business with a 21% market share and a position as the largest manufacturer in its sector in the UK and Ireland.
“We are delighted to have acquired a business of this standing and heritage, and look forward to working with the current management team to strengthen and develop its position over the coming years.”