Refinancing at Kraus
May 28, 2012 (Waterloo, Ontario)
The Kraus Group of companies is pleased to confirm it has reached agreement in
principle for the sale of a majority stake in the business to Hilco Canada, a
subsidiary of Hilco UK, the British private equity firm with other interests in the
flooring and home products sector.
The Group has also secured significant new funding lines from a US‐based
commercial lender. These two developments will strengthen the company’s
balance sheet to support further investment in inventories and new product
The financing process includes a commitment to the restructuring of Kraus’
Canadian operations; this restructuring will enable the Group to significantly
reduce its overall debt burden. Kraus’ management has also reached tentative
agreement with Union representatives in respect of new collective agreements
which will significantly increase the flexibility of Kraus’ labour force. The
financing is contingent on the ratification of these arrangements by union
“We are really pleased to have secured new funders and equity partners to take
the Kraus Group forward.” said Walter Eckhardt, CEO. “The support of our
employees and customers has been vital in allowing us to reach this point, and we
will continue to focus on our customers who choose Kraus for quality soft surface
and hard surface flooring products.”
Hilco UK Investment Director, Chris Emmott, said: ‘Kraus’s recent trading has
been strong, and historically the business has traded with a significant surplus.
However, in more recent times the business has suffered from an unsustainable
debt burden. By working together with the key stakeholders, Hilco Canada looks
forward to Kraus remaining a prominent force in the carpet and flooring industry
for many years to come’.
Notes for editors
The Kraus Group is a leading Canadian manufacturer and distributor of carpet and
flooring. Established in 1959, the business achieved sales in excess of $200 million
in 2011 and employs 500 people in Canada. The business operates a 25 acre
manufacturing facility in Waterloo, Ontario Waterloo and has ten manufacturing
and distribution locations across Canada, the United States and Australia.
Hilco Canada is a subsidiary of Hilco UK, the London‐based restructuring
specialist. Hilco Canada was founded in 2011, following Hilco UK’s acquisition of
HMV Canada, the 120‐store music and DVD retailer. Hilco provides investment
and acquisition finance and working capital funding to businesses. Hilco UK also
owns Home Flooring Solutions Limited which fulfils flooring claims for major UK
insurance groups. HFS was acquired in 2009.
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