Terra Firma

Thorn

Description

Thorn was a UK-listed public company with electrical appliance rental businesses in the UK, USA, Scandinavia and the Asia-Pacific. The company also included Crazy George's (rebranded Brighthouse) and Quadriga.

Quadriga is the largest provider of hotel in-room entertainment and communications infrastructure in Europe. Brighthouse is a leading retailer/retail finance provider of electronic goods and furniture to cash- and credit-constrained customers in the UK.

Strategy

Terra Firma identified that, declining or not, Thorn's core rental businesses would continue to generate substantial and reliable cash flows and were worth more than the public market recognised. Terra Firma identified that, if run for cash rather than low return earnings growth, the UK and Scandinavian rental businesses could be securitised to substantially repay the acquisition price. This would enable the upside from strategic redefinition and operational turnaround in these businesses to be retained at low cost.

Outcome

After some earlier disposals through a variety of routes, the remainder of Thorn was sold to a financial buyer in June 2007.

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