Quadrant has agreed to pump about A$135m into the two business in return for a 60 per cent equity stake, representing a multiple of around six-times the company’s current EBITDA.
“Retail furniture is a bright spot. It’s a A$12bn-a-year business with five per cent a year growth,” Quadrant chief Chris Hadley told The Australian Financial Review.
“It’s a category killer, a scale player and we expect revenue to grow to A$1bn a year within the five-year ownership period.”
Ironbridge acquired both assets at high earnings multiples at the peak of the buyout boom and is understood to be making a loss on its investment, the report said.
The firm will retain a stake in both companies.
Macquarie Group and Partners Group, which both co-invested in the businesses under Ironbridge’s ownership, will hold around 30 per cent of the business together with Ironbridge, the report added.
The company’s management will own just under ten per cent.
Seven banks are said to have provided around $250m of debt, the report added.
Ironbridge was advised by Macquarie Capital.
Copyright © 2012 AltAssets