Perfect Pieces Specialists in British Pottery

Most of the assets of Waterford Wedgwood have been sold to US private equity company KPS Capital for an undisclosed amount. The now-completed deal has been on the cards ever since Waterford Wedgwood went into administration but concerns have persisted over the number and scale of job cuts that may result.

Controversially, KPS has not bought any of Waterford Wedgwood’s assets in Ireland – only the stock. This means that the Waterford factory and its employees are currently standing idle, with redundancy a distinct possibility.

There is some hope that KPS will agree a deal with the Irish government to turn the plant into a modern visitors centre making “artisanal” glassware, but this has not yet been finalised and would depend on substantial investment from the Irish government.

KPS has made no secret of its intention to increase the amount of offshore production – both in Asia and Eastern Europe – meaning that jobs at the former Wedgwood and Royal Doulton factories in the UK could be at risk, too.

KPS says that it plans to “aggressively grow the hell out of it [Waterford Wedgwood]” and that is will now be operated as one efficient company, targeting new overseas markets and large luxury hotel groups such as Four Seasons and Ritz Carlton.

The deal excludes all of the old company’s liabilities so the new Waterford Wedgwood will start with a clean slate. KPS are promising to invest up to €100m in its new acquisition – we’ll have to wait and see how they get on.

The Waterford Wedgwood group has been sold to American private equity company KPS Capital. The deal, which was widely expected, was announced on Friday.

It includes Waterford, Wedgwood and Royal Doulton but excludes Rosenthal, which was also a part of the Waterford Wedgwood empire.

There have been no announcements yet on job prospects for the firm’s Stoke-on-Trent and Waterford based manufacturing staff. According to one report, KPS have not agreed to take over the Waterford manufacturing plant, which stopped production on 5th January when the firm went into receivership. There are fears that more Wedgwood jobs will go abroad – the company already employs more than 1,500 workers at its plant in Indonesia.

The chances of the Wedgwood family succeeding in their bid to demerge Wedgwood from Waterford and run the firm independently again are looking increasingly slim this week.

Both the Irish Times and the Staffordshire newspaper The Sentinel have reported that early bidders KPS Capital look to be favourites to secure a deal to buy the whole Waterford Wedgwood group, possibly with a contribution from the Irish government.

Unsurprisingly, Wedgwood staff are strongly in favour of the Wedgwood family bid as they believe this would reduce the chance of job losses for Wedgwood’s Barlaston staff. On the other hand, a purchase by private equity group KPS Capital is widely expected to translate to expanded offshore production and a reduction in Wedgwood’s UK production facilities, although this has not been confirmed by KPS.

According to The Sentinel, staff at Wedgwood’s Barlaston plant have been told to “clear up” and old stock is being “smashed up”, leading the workers to believe that a purchase deal is close to completion.

As I predicted in my last post on Wedgwood, the company looks likely to be bought out of administration, according to the BBC. Perhaps unsurprisingly, the interested party is an American private equity firm called KPS Capital.

I say unsurprisingly because the largest part of Waterford Wedgwood’s market is the USA. The deal looks likely to include most of the Waterford Wedgwood group – presumably including its three main brands, Waterford, Wedgwood and Royal Doulton.

KPS Capital appear to be a ‘distressed specialist’ fund – sometimes less flatteringly described as a vulture fund – who specialise in buying companies with financial problems. The upshot of this is that they will get the company for a very keen price – but if no one else bids against them, that seems fair, really.

According to The Times, the proposed deal with KPS is likely to leave its two main investors in recent years, Sir Anthony O’Reilly and Peter Goulandris, around £360m out of pocket.

There is no word yet on whether Waterford Wedgwood’s 1,900 UK employees would keep their jobs. However, even before going into administration Wedgwood were planning further outsourcing of ceramics production, so it seems likely that any new owner would do the same – if not more.

The majority of Wedgwood and Royal Doulton production has already been moved overseas and takes place in Jakarta, Indonesia, where the company employs 1,500 people on production.