LDC Said to Be in Advanced Talks to Buy U.K.’s Vita From TPG

  • Vita has 300 million-pound equity value, plus pension gap
  • LDC beat out other buyout firms as bidder for mattress maker

LDC, the private-equity arm of Lloyds Banking Group Plc, is in advanced talks to acquire British mattress maker Vita Group from TPG Capital, according to people familiar with the matter.

LDC emerged as the preferred bidder for the producer of Revo brand foam bedding, said the people, who asked not to be identified because details of the sale process are private. Vita Group has an equity valuation of about 300 million pounds ($436 million) and substantial pension liabilities, which are complicating a deal that may be signed within weeks, said one of the people.

Spokespeople for LDC, TPG and Vita declined to comment.

Since buying Vita in 2005, TPG has changed management, shed assets and expanded operations into eastern Europe. Vita started making latex foam products in Oldham, England in 1949, expanding into carpet underlays, mattresses and car parts. It was listed in 1967 on the London Stock Exchange as British Vita Ltd. until the takeover by TPG. Acquiring Vita would be LDC’s first venture into the processing of polymers, diversifying a portfolio that includes delivery services, health-food and cycling parts.

Vita initially attracted interest from buyout firms including Platinum Equity, Oaktree Capital Group LLC and Sun European Partners LLP, people familiar with the sale process said earlier this year.

Profit Jumps

As Vita’s largest shareholder, Texas-based TPG is represented on its board by Chairman Norman Walker. Chief Executive Officer Joe Menendez, a former executive of French building materials company Cie. de Saint-Gobain SA, joined in 2008 to oversee the sale of some chemical businesses outside of its main focus of polyurethane foams, polystyrene and adhesives.

Sales last year increased 5 percent to 605.4 million euros ($688 million), with earnings before interest, taxes, depreciation and amortization jumping by one-third to 52.5 million euros as raw-material costs declined, according to a company filing. Net cash totaled 141.2 million euros at the end of last year.

Vita has grown in the U.K. and opened furniture and bedding-foam factories in eastern Europe including Poland and Lithuania. It plans to add another large plant in Europe as well as boost capacity in the Middle East.

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