Buyout firm TPG Capital and a Credit Suisse Group AG (CSGN) unit are considering an initial public offering or sale of German bathroom-fixtures maker Grohe Group, according to people familiar with the deliberations.
The two owners may exit Grohe, which they bought in 2004 and may be worth about 2.2 billion euros ($2.8 billion) based on analyst estimates, as early as the second half after boosting earnings at the company, said the people, who asked not to be identified as talks are private. Banks are pitching ideas to TPG and Credit Suisse, which haven’t made a final decision yet, they said.
TPG, the private-equity firm run by David Bonderman and James Coulter, and the Credit Suisse unit purchased Grohe, which calls itself Europe’s largest provider of sanitary fittings, for a reported $1.84 billion from BC Partners Ltd. Private-equity firms are tapping low borrowing costs and rising equity markets to exit investments made before the financial crisis in 2007.
Buyout transactions rose to $112 billion in the first quarter, up from the fourth quarter last year and the first quarter of 2012, according to data compiled by Bloomberg. IPOs in Europe, the Middle East and Africa have raised $5.8 billion this year, about 80 percent more than companies sold in the same period in 2012, according to Bloomberg data.
“It is the nature of being owned by private-equity firms that such steps are always a possibility, but there are at present no concrete plans,” Grohe spokeswoman Ulrike Heuser- Greipl said by telephone. Representatives at TPG and Credit Suisse declined to comment.
Grohe, which was founded in 1936, produces plumbing fixtures ranging from faucets to showerheads and toilet-flushing mechanisms. The Dusseldorf-based company employs about 9,000 people and operates in more than 130 countries. According to preliminary figures, Grohe had earnings before interest, taxes, depreciation and amortization of 270 million euros ($349 million) last year. Final figures will be reported at the end of April.
Companies in the segment usually trade at about eight times Ebitda, according to analysts Robert Eason of Goodbody Stockbrokers and Credit Agricole’s Oliver Girakhou. That would value Grohe at about 2.2 billion euros. Neither analyst covers the company.
The median value of the 123 takeovers in the building and construction products segment announced globally in the past year was 8.7 times the companies’ Ebitda, according to data compiled by Bloomberg.
Grohe in 2011 started buying Joyou AG (JY8), the Chinese maker of bathroom and kitchen fixtures, to gain wider access to Asian markets. Grohe now owns 72 percent of Joyou. TPG and the Credit Suisse unit hold equal stakes in Grohe.