Crystal ball gazing points to a sale of WWRD

Six years ago this week, workers at the Waterford Crystal plant began a sit-in sparked by receiver David Carson’s decision to halt manufacturing there because it had run out of cash.

It was a last, desperate bid to save their jobs, but, unfortunately for them, time had run out for both the facility and its ultimate owner, publicly-quoted Waterford Wedgwood, whose biggest shareholder was Sir Anthony O’Reilly.

New York private equity fund, KPS, a specialist in reviving ailing manufacturers, bought the group several weeks later. The plant at Kilbarry, just outside the city, was shut down and its furnaces turned off. Around 700 people lost their jobs.

The new owners returned crystal manufacturing to Waterford in 2010, but on a much smaller scale, to a facility designed to showcase the brand’s heritage and attract tourists.

It now looks like KPS is preparing to put Waterford Wedgwood Royal Doulton (WWRD) back on the market, with a quoted a price of €650 million, based on projected earnings of €60 million a year. Goldman Sachs is canvassing potential buyers.

KPS is a turnaround specialist, so it was never going to hang on to WWRD indefinitely. It bought the group six years ago, and private equity operators tend to try to cash in their investments after five years.

The business may have exceeded its targets in that time.

In 2010, WWRD’s chief executive, Pierre de Villeméjane, told this newspaper that it was seeking to generate earnings of €40 million-plus from the group. The figures now being quoted are comfortably ahead of that. Taking all of this into account, the time is probably ripe for a sale.

Some reports are suggesting that Asian investors or another private equity firm could end up with the group. Either way, it seems that the “Waterford” bit of WWRD is growing further away from its Irish roots.