At least some Irish people will be familiar with KPS, the US fund which yesterday emerged as the buyer for a collection of six Anchor Glass Container Corporation plants and other facilities that Ardagh is selling in order to get its hands on the bigger prize of Verallia North America.
Just over five years ago, KPS bought Waterford Wedgwood out of a troubled receivership that at one stage was marked by workers barricading themselves into the firm's crystal manufacturing plant in Kilbarry on the edge of Waterford city.
The fund’s purchase signalled the end of production at Kilbarry, but it moved some manufacturing, a visitors’ centre and shop to a new premises at the mall in the city which was partly funded by the local authority in 2010. Within two years, KPS said that it was bringing in 200,000 people a year, making it the Republic’s second biggest tourist attraction.
However, tourist attractions are not its speciality. KPS is focused firmly on manufacturing and it makes quite a success of it.
Last year, it returned $50 million to backers who invested in Waterford Wedgwood.
While it takes on troubled businesses and turns them around, it is just as much an opportunistic buyer – taking on companies whose owners are looking to sell, for whatever reason, meaning it is unlikely to overpay for anything.
You could not accuse it of overpaying for the Anchor Glass assets. Ardagh bought the company for $880 million in August 2012. KPS will pay just under $500 million, a number in line with industry norms for the business it is buying. While the Federal Trade Commission has said that Ardagh's sale of Anchor would ensure real competition in the US market for beer and spirits bottles , KPS partner Jay Bernstein yesterday sounded like the fund intended to make that a reality, and not just in North America. He said that it was a first step in creating thriving enterprise that KPS will grow aggressively on global scale.
It sounds like Ardagh hasn’t just sold a business, but sowed the seeds for the creation of a real rival.
