Japan's Lixil acquires TPG-backed faucet maker Grohe

According to Nikkei, Lixil has lined up more than JPY200 billion in loans from Japanese banks for the acquisition, which was confirmed by Lixil CEO Yoshiaki Fujimori. The company will set up a special-purpose vehicle to handle the transaction, to which it will contribute about JPY130 billion while the Development Bank of Japan (DBJ) will put in about JPY50 billion.

The company's owners had been considering exiting via an IPO but decided by Wednesday to sell to Lixil. TPG and the Credit Suisse unit acquired Grohe back in May 2004 in a secondary buyout from BC Partners, which bought the company from the Grohe and Rost families in 1999. The deal had been valued at EUR1.5 billion ($2 billion), including EUR800 million in debt.

Founded in 1936, Grohe is headquartered in Düsseldorf and employs around 9,000 staff. The business, which manufactures plumbing fixtures for bathrooms and kitchens, reported revenues of EUR1.4 billion for 2012.

This is not the first time Lixil has provided an exit for private equity. In July, Sun Capital Partners sold its stake in American Standard Brands (ASB), a US maker of bathroom and kitchen fixtures, to Lixil for $542 million. The acquisition placed the Japanese company in the top ranks of global toilet makers, alongside Toto of Japan, Spain's Roca Sanitario and US-based Kohler.

Lixil is targeting sales revenues of JPY1 trillion from its international business, with a view to it accounting for 30% of group revenue.

 

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