TPG, CSFB Take Over Faucet Maker –

In its second major deal this month, Texas Pacific Group agreed to acquire BC Partners portfolio company Grohe AG, teaming with CSFB Private Equity for the EURO1.5 billion ($1.83 billion) transaction. For TPG, the acquisition comes on the heels of its $1.4 billion Iasis Healthcare purchase.

Terms of the transaction were not disclosed, although published reports indicated that Credit Suisse First Boston, Citigroup and Deutsche Bank AG would arrange the debt to support the deal. CVC Capital Partners and Bain Capital were also said to be in the bidding for the faucet maker.

Grohe, with sales of around EURO898 million, is a manufacturer of bathroom and kitchen sanitary fittings such as faucets and showerheads. BC Partners acquired the German company in 1999, with published reports putting a price tag of $1.4 billion on Grohe at the time. The firm beat out bids from Kohlberg, Kravis, Roberts & Co. and strategic interest from Kohler to win the deal.

At the time of the transaction, Jens Reidel, a senior partner at BC Partners, told European Venture Capital Journal, a sister publication to Buyouts, “This transaction is setting a new milestone. Transactions like these require a high level of familiarity with the specifics in the respective countries. In such an environment, U.S.-style, financial-engineering driven buyouts may not work as well as in their home market.”

It is unknown how well BC Partners will make out from the sale of the company, but ironically, its sale of the business to a U.S. buyout fund will likely ensure that the firm walks away from the investment with a profit in hand. Teabar Capital and Caisse de Depot et Placement du Quebec were co-investors with BC Partners in the investment.

Grohe hired Merrill Lynch as its advisor last September, which worked down a dual track, bracing the company for either an initial public offering, a recapitalization or a sale of the business. The anticipated IPO was expected to float in the first half of this year, and marketwatchers late last year had projected that an IPO would value the company at between EURO1.5 and EURO2 billion.

However, with the sale to TPG and CSFB, it is likely that the company could one day find itself on the public market again. Peter Krfer-Schun, Grohe’s chief executive, said in a press release, “This [sale] maintains the independence of our company, which may still be taken public at a later stage.”

Representatives for the investor group declined comment for this story.


Buyers: Texas Pacific Group and CSFB Private Equity

Target: Grohe AG

Seller: B.C. Partners

Purchase Price: $1.83B

Advisor: Grohe: Merrill Lynch; Buyers: CSFB, Citigroup, Lansdowne

Legal Counsel: Grohe: CMS; Buyers: Latham & Watkins LLP and Weil Gotshal & Manges LLP