A newspaper distribution business started in 1918 has grown to become North America’s leading travel retailer. Hudson Group now operates more than 550 newsstands, bookstores, cafes and specialty shops in 70 airports and transportation terminals. The company is best known for its flagship Hudson News stores; Hudson News is the only national newsstand brand. Its other concepts include Hudson Booksellers, Kids Works and Euro Café, and partnerships with such leading brands as Crabtree & Evelyn, Life is Good, Quiznos, Sunglass Hut and Godiva Chocolatier. Private equity firm Advent International is the majority owner of Hudson Group, which had revenues of more than $630 million in 2007.
- 面临的难题
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As North America’s leading travel retailer, Hudson Group is in a strong competitive position as airports expand the shopping and foodservice options available to travelers. In 2007 the family that owned Hudson began exploring the possibility of selling a substantial interest in the company to fund growth opportunities.
Meanwhile, Advent International, a leading global private equity firm, was looking for new travel-industry investments. Advent already had extensive experience in the travel sector, having previously invested in nine airport concession, duty-free retail, and airport food and beverage companies.
Before long the two companies were deep into discussions about Advent acquiring a majority stake in Hudson Group. By late summer 2007, they began looking for a lender to provide support for the transaction.
But with capital markets in turmoil, finding a financial services partner was challenging. Many lenders were reluctant to underwrite such a deal because they feared that they would be unable to syndicate the loans in a difficult environment.
Advent and Hudson needed a financing partner with the resources, expertise and commitment to support their transaction, despite less-than-ideal conditions in the capital markets.
- 解决方案
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Advent and Hudson representatives met with the Sponsor Finance unit of CIT Investment Banking Services. Sponsor Finance team members had an ongoing relationship with Advent that dated back more than five years and were able to draw on the industry knowledge of members of the CIT Aerospace group and the CIT Retail Finance Group to validate the potential for growth of premium retail concepts – such as Hudson’s – at busy transportation hubs.
CIT had the knowledge and experience to recognize the power of Hudson’s brand, business model and incumbent presence at leading airports. The Sponsor Finance team and the Retail Finance team members also recognized Advent’s extensive experience in airport retailing, which made the two companies an excellent match.
With its resources, experience and industry commitment, CIT was able to see the merits of the Hudson-Advent transaction. CIT’s experienced bankers also were certain they could complete and syndicate the transaction even in a tumultuous market.
- 结果
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CIT created a custom financial solution that enabled the Hudson-Advent transaction to proceed. The two companies announced that they had reached an agreement in December 2007, under which Advent would become the majority owner of Hudson Group and the existing Hudson management team would continue to run the business.
Despite continued weakness in the financial markets in early 2008, CIT remained strongly committed to the deal. CIT was sole arranger on $295 million in senior secured financing, which consisted of a $235 million term loan and a $60 million revolving line of credit.
Hudson plans to extend its brand outside North America and to continue to test unique concepts, such the CMT Loot and Nashville Star country music network stores that opened at Nashville International Airport in 2008. Hudson Group projects that it will continue to grow, both organically and through strategic acquisition.
