Caradon Bathrooms, the Cheshire, UK-based division of the Caradon plumbing group has been bought by Finnish Sanitec Corporation for a consideration of £82 million on a cash and debt free basis. The sale is for 100% of the share capital of the company. The consideration will be adjusted if net assets at completion are greater or less than £48.7 million.
Acquired in November last year by HSBC Private Equity as part of the £496 million institutional buyout of the plumbing division of Caradon plc, Caradon Bathrooms is best known for its Twyford, Doulton and Royal Doulton product ranges.
The HSBC Private Equity team is particularly pleased to have concluded a deal for the bathrooms business in only six weeks from completion of the original IBO of Caradon’s plumbing division. HSBC Private Equity financed the deal for £496 million, provided through a combination of institutional equity and senior debt and mezzanine facilities arranged by JP Morgan Securities. JP Morgan Capital was a significant minority co-investor in the transaction. Simon Pooler of HSBC private equity said that the company got a very good price for the business, adding: “Caradon Bathrooms will be worth more to Sanitec than it was to us. There was always the possibility at the time we bought out the plumbing division, that we would sell the bathrooms division, but there are no further plans to dispose of the rest of the business.”
For the Caradon Bathrooms sale, the team of professional advisers from the £496 million deal were united again, with Edward Pysden from the Manchester office of Eversheds and Ken Williamson of Ernst & Young Corporate Finance in Europe. Williamson said of the deal: “This has been one of those rare situations where things have gone exactly according to the great corporate finance plan.”
The integration process will be headed by Pertti Lehti, managing director of Ido Bathroom Ltd, a Finnish subsidiary of Helsinki-based Sanitec. And the existing Caradon Bathrooms management team will continue to run the businesses. Through the acquisition, Sanitec should gain a strong position in the UK bathroom ceramics market, increasing its market share to more than 20%.
The Sanitec Group is a leading designer, manufacturer and marketer of bathroom ceramics, bath and showers and vacuum sewage systems. Most of the company’s 42 production plants are in Europe, while the sales and marketing network operates worldwide. Sanitec employs around 8,400 people and is listed on the Helsinki Stock Exchange. Berndt Brunow, president and ceo of Sanitec Corporation, stated: “This is a logical step in Sanitec’s strategy. Caradon is a quality player that is increasing its market share in an important market. Twyford, Doulton and Royal Doulton are strong quality brands with a lot of potential.”
Caradon Bathrooms employs more than 950 people, with 87% of sales in the UK market and the remainder in export markets such as the Middle East, Africa, and Asia. Mark Pickering, managing director of Caradon Bathrooms, is looking forward to joining the Sanitec management team and said: “We are very pleased to become part of a focused bathrooms products group with such a good reputation as Sanitec. We are optimistic about the opportunities that Sanitec brings for our customers here in the UK market, for the employees of the company and for us as a management team.”