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Bernstein Group Holdings

www.bgh.co.uk

Transaction Type: Turnaround Finance
Status: Current Investment
Sector: Kitchen Manufacture
Investment Date: February 2007
Deal Size: £7.5 million

Endless Contact: Phil Tate

THE BUSINESS

The Bernstein Group was originally acquired out of insolvency by Bill Gleave in 2004 after its major customer re-sourced its kitchen requirements. Since this time, the company has successfully widened its sales channels to avoid any future issues with either customer or sector dependence.

Through this focus on sales, the company now supplies into numerous house builders, retail channels, national trade counters and social housing as well as through its factory outlet centre. This has led to compound sales growth in excess of 20% per annum over the past three years. Despite this success a number of legacy issues, principally surrounding its direct-sell operation (The Kitchen Studio), continued to drain the company’s resources.

As a result, Administrators were appointed in November 2006 to restructure the company’s operations. This led to the closure of the loss-making “The Kitchen Studio” division.

The company continues to trade under the successful Grovewood and Four Seasons brands. It employs in excess of 350 people.

INVESTMENT COMMENTARY

Endless acquired a majority stake in the Bernstein Group in February 2007 following a Company Voluntary Arrangement. Bill Gleave, Executive Chairman, also made a substantial personal investment alongside Endless. The restructured business has a strong balance sheet and is no longer subject to the high gearing levels that historically constrained it.

The company’s well-invested 500,000 sq ft factory and warehouse on the M61 in Bolton has historically been a problem due to its excess capacity, but it is now becoming a substantial advantage. It is one of the few UK manufacturers with sufficient capacity to meet the Government’s improvement targets for social housing. The company is well placed to deliver this and service the growth expected in its other routes to market.

Burdale Financial provides flexible working capital facilities for the company.

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