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PHP to invest EUR60m in Arc International

Peaked Hill Partners (PHP) is to provide EUR60 million in new capital to Arc International to support the company’s turnaround and growth strategy.  

Arc International is the world’s largest producer of glass tableware, with headquarters in Arques, France.

The Ibled-Durand family, which has controlled the company for more than 100 years, will invest EUR2 million to retain approximately 20% of the company, illustrating their commitment and faith in its future. “This is a major step forward for Arc International, its customers, and its employees,” said Xavier Ibled, a member of the Ibled-Durand family, “Bringing in external capital will enable Arc International to renew its historical commitment to design and technical leadership for clients we serve and others.  It will secure a good future for all our stakeholders and the communities where we do business.”

The deal was led by PHP, an American investment structure founded by Tim Gollin, previously a Partner in JPMorgan Chase’s private equity unit One Equity Partners, together with Cédric Aymard and Didier Riebel in France, two specialists in business transformation.

The bidding agreement signed yesterday provides for PHP and its investors to repurchase substantially all existing bank debt, significantly reducing Arc International’s financial costs and providing new flexibility to manage the company in the future. The capital injection in Arc International was linked to the company’s employees representatives and unions agreement to the final terms of a Social Plan in Arques, which was reached on January 27th and which will maintain production at Arc’s flagship French site in Arques, Pas-de-Calais, in France.

Arc International’s iconic brands include global market leader Luminarc®, focused on distinctive modern design at affordable prices; Arcoroc® and Chef & Sommelier®, providing stemware and dinnerware for professional and “prosumer” markets; and Cristal d’Arques® Paris, the market leader in traditional glassware with a contemporary touch.

“Arc International is a great business, with highly skilled employees, who for some years have labored under a difficult capital structure,” says Tim Gollin, Managing Partner of PHP. “With the support of the French State and local public authorities, significant cooperation from debtors, openness of family shareholders and a constructive attitude from labor-unions and employees at Arques, we have been able to structure a transaction which will deliver value to all parties and provides a good future for the company, its customers, its employees, and all other stakeholders.”

Under the terms of this bidding agreement, and after the interim management team successfully concluded the investment process begun 18 months ago, Tim Gollin will become Arc International’s new Chief Executive Officer, and Cédric Aymard and Didier Riebel will take on operational responsibilities alongside key managers of the Group and members of the founding family.

Closing of the transaction is subject to customary approvals and is expected to occur by end March 2015.  PHP was advised by Yann Dever and Gilles Mentre at Lazard in Paris, by Jean-Pierre Farges at Ashurst in Paris, and by Ira White at Jones Day in New York.

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