German producer of sanitary ware Grohe is set for a change of ownership. The current shareholders, investment funds TPG Capital and Credit Suisse, are looking for an exit strategy. They have appointed business bankers to make some offers, ranging from a sale to a public offering.
New momentum under current owners
Grohe came into the hands of its current owners in 2004, when they bought it from BC Partners for 1.5 billion euro. BC Partners had owned the company for five years.
The new owners gave the company some new momentum: despite the crisis Grohe saw its sales rise by 21% to 1.4 billion euro last year, while the company cash flow rose 18% to 273 million euro. The progress came from an adjustment and expansion of the range.
Since 2011 Grohe also acquired an interest of 72% in Chinese sector partner Joyou, which should give the company better access to the Asian markets. Joyou has a network of 4,000 location in China.
Right time for takeover
Still TPG and Credit Suisse feel it is time to leave. The low interest rate makes it possible for buyers to get cheaper financing. Furthermore it is fairly calm on the stock markets and there have been more takeovers lately. By the standards of an investment fund, both TPG and Credit Suisse have been at the helm for quite some time.
Analyst say the company is worth about 4 billion euro, including the takeover of a net debt of 1 billion euro. They used the rating of sector partner Geberit to calculate the value of Grohe.
German world player
Grohe was founded in 1936. The company employs about 9,000 people and has production locations in Germany, Portugal, Canada and Thailand. The products are sold in more than 130 countries. Half of sales still come from Europe though, about a quarter from China.
A sale of the company – to an investor or via an IPO – is expected in the third or fourth quarter of this year.