Select Page

GP Investments Acquisition Corp. (NASDAQ:GPIA)  a blank check company formed a year ago by Brazilian leading private equity firm GP Investments, Ltd., has agreed to acquire WKI Holding Company, Inc., the parent company of World Kitchen, LLC, a leading multinational manufacturer and marketer of houseware products with a portfolio of brands including Corelle, Pyrex, CorningWare and Snapware. World Kitchen’s enterprise value is approximately $566 million at $10.00 per share, implying a multiple of 7.2x projected calendar year 2016 adjusted EBITDA of $78 million, and post-closing equity value of $330 million, said GP. Three years ago, World Kitchen started exploring a sale of the company, and hired global middle-market investment bank Robert W. Baird & Co. to shop the company, reportedly seeking $600 million to $700 million in May 2013. World Kitchen began operating as the Corning Consumer Products division of Corning Inc. (NYSE: GLW), until it was spun off from Corning and acquired by Borden for $600 million in 1998. In 2002, the company filed for bankruptcy under Chapter 11 and underwent financial reorganization. As of 2004, World Kitchen has been privately held, and as a result of its financial restructuring it became a portfolio company of Oaktree Capital (NYSE: OAK), a leading global alternative investment management firm with $97 billion in assets under management, and New York-based W Capital Partners, a secondary market private equity investor. World Kitchen is a market leader in the global housewares segment. The company manufactures and markets a diverse portfolio of iconic brands across a broad range of product categories, including dinnerware, bakeware, storage, cookware and cutlery. World Kitchen’s international footprint, distribution network, channel diversity and strong relationships with key retail partners sustains its leading positions in mature markets and positions it to drive growth in select high-growth emerging markets. It employs more than 3,000 people globally, including 2,300 in the United States. “World Kitchen presents a unique investment opportunity, with significant long-term, high-growth potential,” said Antonio Bonchristiano, CEO of GPIAC and GP Investments, Ltd. “The company is a proven product innovator, with a diverse international footprint across retail, online and other channels.” “World Kitchen was seeking a strong, growth-oriented financial sponsor with access to public capital markets to partner with us in our next phase of growth,” said Carl Warschausky, president and CEO of World Kitchen. A GP affiliate will co-invest $50 million in the form of new GPIAC common stock at a price of $10.00 per share in cash. At closing, GPIAC will reincorporate from the Cayman Islands to Delaware and is expected to be renamed World Kitchen Group, Inc., trading NASDAQ under the ticker symbol “WDKN”. The acquisition will be funded through a combination of cash and the issuance of approximately 6.5 million shares of GPIAC common stock at $10.00 per share to World Kitchen’s current stockholders. The cash component of the consideration is expected to be funded by a combination of cash, the issuance of 5 million shares of GPIAC common stock to an affiliate of GP, and the proceeds of $275 million in new debt being provided by Citigroup and BMO Capital Markets. GP Investments will become the largest single stockholder with approximately 28% pro forma ownership on a fully-diluted basis, and former World Kitchen stockholders will have approximately 20% pro forma ownership. World Kitchen is expected to have an estimated $43 million cash balance to fund future growth, and a net operating leverage of 3.0x 2016 EBITDA. The transaction, which has been approved by the boards of directors of both companies, is subject to approval of GPIAC shareholders and the satisfaction or waiver of customary closing conditions, including regulatory approvals. The transaction is expected to close in July 2016. Citigroup served as GPIAC’s capital markets advisor, UBS served as GPIAC’s financial advisor, and Duff & Phelps served as financial advisor to the Special Transaction Committee of the Board of GPIAC. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to GPIAC. Morgan Stanley & Co. LLC served as financial advisor, and Latham & Watkins LLP and Davis Polk & Wardwell LLP served as legal advisors to World Kitchen. GP Investments Acquisition Corp. (GPIAC) was created by GP Investments in May 2015 via an IPO that raised $172.5 million in proceeds for the purpose of identifying attractive investment opportunities in the United States or Europe, with a focus on companies with long-term growth potential in the consumer goods, services and retail sectors. The creation of GPIAC is consistent with GP Investments’ strategy of growing its assets under management via expansion into different geographies and asset classes, primarily in the form of permanent capital. The company’s sponsor is GPIC, Ltd., a wholly owned subsidiary of GP Investments, Ltd. GP Investments, Ltd. (also GP Investimentos) (BM&F Bovespa: GPIV11) is a leading private equity and alternative investments firm in Latin America, with more than 20 years’ experience in corporate investing. The company has a strong track record of successful equity capital market transactions, delivering strong returns and building long-lasting enterprises. Since its inception, the company has raised approximately $5 billion from international investors and has invested in more than 50 companies across 15 sectors. In May 2006, GP Investments, Ltd. completed its initial public offering, becoming the first listed private equity firm in Brazil. The firm’s shares are listed on the Luxembourg Stock Exchange and trade on BM&F Bovespa, the Brazilian Stock Exchange, via Brazilian Depositary Receipts (BDRs). The firm was founded in 1993 and is headquartered in Hamilton, Bermuda, with offices in São Paulo, Brazil, New York, and Zurich. GP Investments was originally founded by legendary Brazilian investor Jorge Paolo Lemann, who sold the firm in 2004 to his junior partners and then went on to found 3G Capital. Most recently, in July 2015, 3G Capital partnered with Berkshire Hathaway to complete the combination of H.J. Heinz Company and Kraft Foods Group, forming the Kraft Heinz Company, following 3G and Berkshire’s acquisition of Heinz in June 2013. Previously, in December 2014, 3G Capital completed the combination of Burger King and Tim Hortons, forming Restaurant Brands International, following 3G’s acquisition of Burger King in October 2010. Affiliates of 3G’s Partners are meaningful shareholders of AB Inbev since 1989 and Lojas Americanas since 1983. Lemann is controlling shareholder and board member of Anheuser-Busch InBev. World Kitchen, headquartered in Rosemont, Ill., manufactures and markets products worldwide through a portfolio of brands, including Pyrex, Corelle, Corningware, Snapware, Baker’s Secret, Chicago Cutlery and Vintage Charm. The company’s brands and products have a strong reputation for quality, innovation, performance and durability. World Kitchen employs approximately 3,000 people, and has major manufacturing and distribution operations in North America and Asia-Pacific regions. Pyrex and CorningWare are registered trademarks of glassmaker Corning Inc., used under license by World Kitchen.]]>