BC Partners Victorious In German Mega-Deal –

BC Partners last month emerged as the winner of a hotly contested auction for Friedrich Grohe AG, the family-owned German water equipment and bathroom fittings group. Although terms of the transaction were not disclosed, sector analysts have set the price tag at as much as $1.4 billion, while representatives of BC Partners itself have been touting the transaction as the largest leveraged buyout seen in Germany.

BC Partners acquired 1.7 million shares, representing a 51% stake in Grohe, from the Grohe and Rost families and will offer a maximum of euro 300 per share for 1.3 million non-voting preferred shares.

A Flood of Interest for a Plumbing Co.

Grohe attracted widespread interest earlier this year when the company’s owners retained Credit Suisse First Boston to find a buyer for the business, but the field was eventually whittled down to three serious contenders: Kohlberg Kravis Roberts & Co., which was tipped as the likely victor just days before the deal was announced; Kohler, the U.S. plumbing supplier; and BC Partners.

Market observers believed BC Partners continental European credentials-the firm has local teams in Paris, Milan and Hamburg, in addition to London and New York offices-as well as its successful track record of expanding and developing portfolio companies were instrumental in winning the deal. According to a statement from Grohe, “The decision in favor of BC Partners was taken because of agreement on general strategic business matters.”

“This decision is a great opportunity for Grohe. We will continue to expand the successful water technology concept and consistently improve the Grohe brand’s global market penetration,” said Peter Krfer-Schun, managing board chairman of Grohe. “We want to grow and we will grow. BC Partners is a competent and experienced market player who will effectively assist us in achieving our strategic objectives.”

Grohe is one of the world’s principal players in the sanitary products and systems sector. The company, which supplies bathroom fittings to many major international hotel chains, ranks as one of Germany’s leading consumer brands.

Grohe, which has a work force of some 5,700 people, last year earned more than DM 180 million ($98.1 million) on sales of DM 1.4 billion ($763 million), corresponding to a 12.8% profit margin, an increase of 1.1% from the previous year.