Marubeni Corporation (TKO: 8002), a major Japanese trading company, is the corporate parent of Swift Spinning, a 100 year-old textile manufacturer based in Columbus, Georgia. Swift Spinning is the third largest producer of combed and carded ring-spun yarns sold to third parties, and markets these products to hosiery, knitting and woven customers such as Ralph Lauren, Liz Claiborne, Goldtoe and Nike.
Leveraging our significant experience in the textile industry, Brookwood was engaged to advise Marubeni Corporation on the sale of Swift Spinning.
Engagement Process and Outcomes
The Challenge – Marubeni sought to divest Swift, which no longer fit into the parent’s global strategic plan. While Swift Spinning had enjoyed several years of profitability, it operated in a declining industry. Investors viewed with concern perceived threats of foreign substitute products, customers integrating vertically, and the pricing advantages of the three larger industry competitors. Our client also was interested in confidentiality, and mandated narrow marketing to a limited number of financial buyers and certain strategic competitors.
Effective Positioning and Marketing – Brookwood developed a comprehensive selling memorandum, which carefully outlined the positive industry dynamics and Company’s niche competitive advantages. Further, Brookwood leveraged its in-depth, historical industry knowledge to put the current industry concerns in the appropriate context. Brookwood highlighted the synergies available to strategic buyers based upon this detailed understanding. All but one of the initial prospective buyers submitted an indication of interest to acquire Swift.
The Result – Brookwood completed a successful transaction as Swift Spinning was purchased by Blackstreet Capital. Even with sub-budget performance prior to closing, the purchase price was substantially in line with Brookwood’s original estimates. This uniquely complex transaction involved multiple hurdles, including the sale leaseback of IRB-backed real estate, the transfer of pension plans, and the cultural differences between the Japanese parent and the U.S. based buyer.