Silentnight-owner to end controversial tenure with sale of bed manufacturer

The proprietor of Silentnight, 1 of Britain's biggest furniture manufacturers, is preparing to extremity a arguable 14-year tenure which included settlements with regulators worthy tens of millions of pounds.

Sky News has learnt that HIG Europe, which bought Silentnight done an insolvency process successful 2011, has appointed bankers astatine Rothschild to merchantability the company.

City sources estimated connected Monday that the institution could beryllium worthy successful the portion of £100m.

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A woody is improbable to beryllium concluded with a purchaser until adjacent year.

When the merchantability does instrumentality place, it volition extremity HIG's relation with a institution which recovered itself astatine the centre of 1 of the astir contentious backstage equity deals successful the UK for decades.

HIG Europe, which specialises successful buying mid-sized companies, acquired Silentnight successful 2011 aft identifying an accidental to make a handsome instrumentality if it could onslaught a woody without the bed-maker's pension liabilities.

The backstage equity radical bought a chunk of Silentnight's debts, enactment successful spot caller restrictions connected its borrowing facilities and past forced it into a restructuring process.

As a effect of the ensuing currency crunch, KPMG, the accountancy firm, enactment Silentnight into medication and instantly sold its assets to HIG Europe without its pension scheme.

The woody triggered an probe by The Pensions Regulator, which utilized its anti-avoidance powers to prosecute the buyout steadfast for important compensation.

The watchdog issued 2 informing notices, successful 2014 and 2016, with HIG Europe seeking a judicial reappraisal of the latter.

Its petition was rejected, and successful 2021 it agreed a £25m colony with the pensions watchdog.

Although those funds were injected into Silentnight's pension scheme, the injection was not capable to forestall its work for paying pensioners being transferred into the Pension Protection Fund, the industry-funded lifeboat.

"Our lawsuit was that HIG utilized the power that was disposable nether the lending facilities to bring astir the unnecessary insolvency of different viable companies that were supporting a [defined benefit] pension scheme," TPR said astatine the clip of the settlement.

"We would not expect lenders to bring astir unnecessary insolvencies, and truthful we would not ordinarily expect targeting them with our powers.

"However, we volition beryllium alert to immoderate lawsuit wherever we judge an unnecessary insolvency is brought astir to sever a strategy from its leader and volition prosecute those cases to due outcomes successful accordance with our statutory objectives."

HIG Europe was not the lone enactment which was deed successful the pouch implicit its behaviour successful narration to Silentnight.

In 2021, KPMG was fined astir £13m by the Financial Reporting Council - astatine the clip a near-record sum - for its relation successful facilitating the furniture manufacturer's pre-pack merchantability to HIG Europe.

An FRC tribunal besides fined the KPMG spouse who led the deal, David Costley-Wood, and banned him from holding rank of the accountants' nonrecreational assemblage for 13 years.

KPMG's restructuring limb successful the UK was sold - besides successful 2021 - to HIG Europe, and rebranded arsenic Interpath Advisory.

The backstage equity steadfast is present successful the process of initiating a merchantability process for the concern which could worth it astatine astir £800m.

A spokesperson for HIG Europe declined to remark connected the assignment of bankers.