Equistone acquires Franke Water Systems

The deal is expected to close in H1 2021.

Thorsten Klapproth, former CEO of Hansgrohe and WMF, is also participating in the deal as a co-investor.

Franke Group is owned by Swiss investment holding company Artemis Group. The divestment will see Franke Group's business units limited to its Franke Home Solutions, Franke Foodservice Systems and Franke Coffee Systems divisions.

The deal comprises Water Systems Commercial Group (WSC) and KWC Group, which have production and sales facilities in Switzerland, the EU, the UK, the UAE and China.

Unquote sister publication Mergermarket reported in July 2020 that Franke Group was looking to divest the business. The unit was to be marketed based on EBITDA of CHF 20m and revenues of CHF 200m. Nord Holding was cited by three sources as a sponsor that was likely to look at the asset.

Equistone is deploying equity via Equistone Partners Europe Fund VI, which held a final close in March 2018 on €2.8bn. The fund generally makes equity investments of €25-200m, focusing on companies with enterprise values of €50-500m. The fund has now made 20 platform investments, according to Unquote Data, and intends to make 25-30 investments in total.

The GP intends to work with Franke Water Systems' management team to support both organic and acquisitive growth, Equistone said in a statement.

Company
Franke Water Systems was formerly part of Franke Group, which was founded in 1911 and is headquartered in Rorschach, Switzerland. The KWC unit specialises in residential bathroom, residential kitchen and commercial kitchen fittings, while WSC focuses on steel fittings for commercial and public bathrooms. The company employs 900 staff and generated revenues of CHF 192m in 2020.

People
Equistone Partners Europe – Stefan Maser (partner); David Zahnd (investment director); Roman Emanuel Hegglin (investment manager).
Franke Group – Patrik Wohlhauser (CEO); Patrick Truttmann (CFO).

Advisers
Equity – Munich Strategy (commercial due diligence); TKHD (commercial due diligence); KPMG (financial due diligence); Bär & Karrer (legal, tax); ERM (environmental due diligence); Marsh/Kessler (insurance due diligence); GCA Altium (debt advisory); Enqcor (M&A).
Vendor – Credit Suisse (corporate finance).

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• Topics
• Buyouts
• DACH
• Industrials
• Switzerland
• Equistone Partners Europe
• Carve-out