FRANKFURT, Sept 14 Three peers of Europe's
biggest bathroom equipment maker, Grohe, submitted
final offers for the private-equity owned company by a Friday
midnight deadline, three sources familiar with the deal told
Grohe's owners, TPG Capital and the private equity
arm of Credit Suisse are selling the group in a
so-called dual track process, which includes the option of
floating it on the stock exchange.
They may launch the initial public offering within the next
couple of weeks, while continuing to talk to possible buyers to
retain competitive tension in the sales process and reap the
highest possible price, two of the sources said.
A potential stock market listing would likely take place by
mid-November, they said.
The sellers had originally been hoping for a valuation up to
4 billion euros ($5 billion) in equity and debt. That would have
been in line with the valuation of Swiss peer Geberit,
which trades at 14 times earnings before interest, taxes,
depreciation and amortization.
However, Geberit, Japan's Lixil and Brazil's
Duratex have made final bids valuing the German
company at no more than roughly 3 billion euros, two of the
They added that the bids came in below the 3.2-3.5 billion
euros that of one of IPO organisers has signalled the group
could be valued at in a flotation.
U.S.-based Fortune Brands has dropped out of the
auction, while two private equity groups have also submitted
final offers, one of the sources said on Saturday.
TPG and Credit Suisse bought Grohe for 1.5 billion euros in
2004 from BC Partners, a transaction that sparked criticism of
private equity investors in Germany.
The sale of Grohe could be one of the largest European
private equity sales this year along with BC Partners'
acquisition of German publisher Springer Science
and CVC's purchase of German energy-metering
Grohe, its owners and their advisers - Credit Suisse and
Goldman Sachs - as well as Geberit, Lixil and Duratex declined
to comment. Fortune was not available for comment.
Analysts say that buying Grohe could be a stretch for some
of the company's smaller peers: Duratex has a market
capitalisation of $3.5 billion and Lixil's is $6.6 billion.
In the first half of 2013, Grohe increased its adjusted
Ebitda by six percent to 141 million euros, while sales rose 5
percent to 730 million euros.