Grohe sold to LIXIL
January 2014. The Grohe Group, one of the world’s leading providers of sanitary fittings, has entered into an agreement with Lixil Corporation and Development Bank of Japan in relation to the sale of an 87.5% equity interest in Grohe Group from TPG and DLJ Merchant Banking Partners. This transaction represents the largest ever German investment by a Japanese company. The combined sanitary businesses of both groups generate more than EUR 4 bn of annual revenue, making it the largest player in its industry.
- TPG and DLJ to sell their 87.5% equity interest in Grohe to Lixil and Development Bank of Japan
- With an implied Enterprise Value of EUR 3.06 bn, this is the largest ever German investment by a Japanese company. The transaction is expected to close in Q1 2014
- Grohe and its subsidiary Joyou remain independent within Lixil Corporation. CEO David Haines has signed new five-year contract
- Grohe to continue its strategy of sustainable growth, and to continue to be a leading consolidator in the international sanitary industry. Lixil to support this strategy
Grohe remains independent and continues to implement its plan for longterm, sustainable and profitable growth. With the support of Lixil, this will also include becoming a leading consolidator in the global sanitary industry, which is still characterized by a high degree of fragmentation.
David J Haines, Chief Executive Officer of Grohe, will remain in this position and has signed a new five-year contract. Lixil and Development Bank of Japan will have seats on the Supervisory Board of the holding company of Grohe Group S.à.r.l. in Luxemburg.
“For Grohe and Joyou, Lixil is a perfect match. It is currently building a strong track record as a global leader in the building materials and housing equipment industry. As a growth-oriented company, Lixil has always been the preferred partner to support us with our growth strategy, especially in emerging markets.”
– David Haines, CEO of Grohe
For Joyou in particular, this new partnership will be of enormous benefit, as their ability to grow and strengthen the brand in the Asia-Pacific region will be enhanced.
“We are proud to have played our part in the remarkable transformation of Grohe over the last 10 years into a truly first-class global business. Grohe and its management will be a great combination with the Lixil Corporation.“
– Stephen Peel, Managing Partner at TPG
“After almost 10 years of supporting Grohe and its terrific management team through an international expansion plan, we are delighted to see a continuation of the company’s strategy to be the global market leader in the sanitary industry by joining forces with Lixil Corporation.“
– Colin Taylor, Managing Director and Partner at DLJ Merchant Banking Partners
“Grohe is one of the most well-known brands in the global sanitary market. In addition to its high standards for quality, Grohe has received high acclaim globally for its leading product design and innovation. We have great respect for what CEO David Haines and his management team have achieved – bringing Grohe into the Lixil family allows us to make further progress in building the leading platform in the global sanitary industry whilst also strengthening our distribution network in Asia.”
– Lixil President Yoshiaki Fujimori
Transaction structure and volume
Lixil and DBJ will acquire Grohe through a jointly owned entity of which each party will own a 50% voting interest.
“The joint acquisition structure enables Lixil to act on this strategic opportunity while maintaining its current leverage level and the financial flexibility to pursue other strategic opportunities as they arise.”
– Lixil President Yoshiaki Fujimori
The implied Enterprise Value, including the assumption of debt, is EURO 3.06 bn. The transaction is subject to customary regulatory and antitrust approvals and is expected to close in the first quarter of 2014.
Grohe, TPG and DLJ were advised by Acxit Capital Management – now part of ACXIT Capital Partners, Credit Suisse, Goldman Sachs, Weil LLP and Clifford Chance. Lixil was advised by BNP Paribas, Moelis & Company, SMBC Nikko and Linklaters.
About ACXIT Capital Partners
ACXIT Capital Partners is a leading international corporate finance and investment advisory firm for mid-market clients and entrepreneurs in Europe and beyond. Since 1998, we offer our clients comprehensive corporate finance advisory services including M&A and capital markets advisory as well as restructuring, debt and strategic advisory. As an independent, privately owned firm we maintain offices in Frankfurt, Berlin, Munich, Zurich, Vienna and Hong Kong as well as strong alliances in France, China, India and the USA.
To date, we have completed more than 350 transactions with a total deal/financing volume of approx. EUR 17bn. Our clients are corporations, family-owned businesses, entrepreneurs, financial sponsors and family offices. While our home market is in the German speaking region, most clients are international and transactions cross-border. (www.acxit.com)
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