Cognis realises IWP investment

Friday, November 30, 2012

In November 2012 Cognis successfully realised the bulk of its investment in IWP International. This was the culmination of a 6 year turnaround and disposal programme for the European consumer goods group, following a distressed takeover of the business in 2005 by a syndicate of investment funds led by Strategic Value Partners and Cognis Capital.

IWP was a Dublin listed group, that principally operated in UK, Netherlands and Poland and whose divisions centred around cosmetics, perfumes, toiletries gift packs, a personal care retail chain and an investment in a manufacturer of household and industrial cleaning products. The group was facing financial difficulties in 2005 and the group’s debt began to trade from original holders to secondary players and Cognis began to accumulate a position.

Following prolonged and intensive negotiations with all stakeholders, a comprehensive financial restructuring took place which resulted in IWP being delisted in March 2006. The restructuring involved a debt to equity swap, following which Cognis held the second largest shareholding of the newly structured private equity company.

Over the next 6 years a comprehensive turnaround and disposal programme was effected: A CRO was initially installed; ongoing operational management changes and improvements were implemented; one division was closed down and two were merged with manufacturing being outsourced. Disposals were effected through MBO’s to Dutch and UK management teams and trade sales of divisions and individual products to international players, including the US based Church and Dwight, Hong Kong based Li and Fung and Interchem S.A. of Poland.

The disposal programme was successfully completed in 2011 and a solvent liquidation of the group commenced in December 2011 in order to return money to shareholders.  This resulted in the first distribution in November 2012.