Springs on plan to go private
Thomas Russell -- Furniture Today, April 30, 2001
FORT MILL, SC — Plans to take Springs Industries private in a $1.2 billion buyout moved two big steps closer to completion last week, first when the deal won the blessing of the major mill's board of directors, and then the controlling Close family and investor David Stockman signed the definitive recapitalization pact that will finance the deal.
The bid to take Springs private was launched early in February, following six months of intensely private negotiations between chairman and ceo Crandall Bowles and David Stockman's Heartland Industrial Partners, a private equity company firm in Greenwich, CT. Stockman, the White House budget director during the Reagan administration and father of "trickle-down economics," was the prime mover in the deal, approaching Bowles last fall.
Once the deal is completed, following the buyout of all outstanding Springs stock and the merger of Springs and a Heartland affiliate, Heartland Springs Investment Company, the founding Close family will hold a 55 percent stake in the company, while Stockman will control 45 percent.
The deal requires approval of Springs shareholders at a meeting expected to be held in late July or early August.
The deal is widely viewed as an exit strategy for the far-flung members of the founding Close family, which have controlled the major mill for more than a century. And with cash at its disposal, and a mandate for aggressive growth under Stockman's watchful eye, Springs is expected to stake out an increasingly dominant role in the U.S. home fashions industry. Stockman has made it plain since the deal was first unveiled that he wants Springs to roughly double its annual sales over the next five years, through a string of strategic acquisitions that could bring the company to $4 billion to $5 billion in annual sales. At that point, the soon-to-be private company could go public once again with the sale of stock, allowing members of the Close family to either hang around or cash out, and Stockman to make a substantial profit on his Springs investment.
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