Leading global law firm Herbert Smith Freehills Kramer has advised BNP PARIBAS and Peel Hunt LLP – acting as joint bookrunners – on Coats Group PLC's (Coats) equity placing, separate retail offer and director subscription to raise gross proceeds of approximately £250 million (the Capital Raise).
The proceeds of the Capital Raise will be used to part fund the acquisition and associated costs of OrthoLite LLC (OrthoLite), the global market leader of premium insoles, for an enterprise value of US$770 million. The remainder of the cash consideration will be funded via new debt facilities with Coats' existing lenders.
Coats is a global leader in industrial threads and consumer textile crafts, listed on the Main Market of the London Stock Exchange and a constituent member of the FTSE 250 Index. Coats serves a diverse range of industries including footwear, apparel, and automotive, providing innovative and sustainable solutions through its extensive product portfolio. The acquisition of OrthoLite accelerates Coats' strategy to create a 'super tier 2' supplier for footwear components, strengthening Coats' existing footwear business through expansion into the attractive, high-growth premium insole segment.
The Capital Raise was executed on a compressed timetable to fit within the M&A auction process, demonstrating the power and flexibility of the UK equity markets in enabling strategic UK companies to swiftly raise significant capital at scale including in competitive auctions, thereby positioning themselves on a level playing field with private equity buyers and also illustrating the potential of recent UK prospectus reforms.
The London Equity Corporate Markets team was led by co-head of UK ECM Michael Jacobs and partner Sarah Ries-Coward together with associates Jen Yong and Jhanelle Bisasor, supported by head of US Securities Tom O'Neill on the US aspects.
Partner Sarah Ries-Coward commented: "We are very pleased to have advised BNPP and Peel Hunt on a successful capital raise within a compressed timeline, which exemplifies our deep expertise and strong capabilities in the UK equity capital markets. Many congratulations to the Coats team on this important milestone as well."