PE-backed Grohe circled by trade players

Ellie Pullen
22 July 2013

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Plumbing fixtures manufacturer Grohe, which is owned by Texas Pacific Group Capital (TPG) and CSFB Private Equity, has attracted bids from a number of international trade players in an auction that could see the company fetch up to €4bn, according to reports.

Grohe's owners received six bids by Friday's exploratory offer deadline, some of which were reportedly submitted by large trade players including Switzerland-based competitor Geberit, Japan-based Lixil and US-based Fortune Brands.

TPG and CSFB are currently running a dual-track process for Grohe, reports state, meaning they may choose to float the company later on this year instead of pursuing an auction-led offer.

According to Reuters, the possible sale gives Grohe an enterprise value of €4bn. TPG and CSFB acquired the company in May 2004 for an enterprise value of €1.5bn, €800m of which was provided as a debt facility by Citigroup, Credit Suisse and Deutsche Bank. The firms bought the company from BC Partners, which took Grohe private by acquiring shares previously traded on the Frankfurt Stock Exchange as well as wholly buying out the founding family's stake in the business, according to unquote" data.

If the sale of Grohe takes place at or near the speculated price, it would surpass EQT and GIC's sale of German media publishing house Springer Science for €3.3bn – an exit that also came about following a lengthy dual-track process. As reported by unquote" last month, Springer's owners eventually opted for a secondary buyout, selling the business to BC Partners, after months of uncertainty.

TPG and CSFB have held onto Grohe for a substantial length of time. However, the company's owners have been considering their exit strategy for a couple of years and TPG was reported by unquote" to be mulling a flotation of the company in April.

Grohe, which is headquartered in Düsseldorf, was founded in 1936 and currently employs around 9,000 staff. The business, which manufactures plumbing fixtures for bathrooms and kitchens, reported revenues of €1.4bn for 2012.