EQT Puts Toilet-Maker Sanitec On Block

Makers of toilets and taps are sizing up Finnish rival Sanitec, put on the block by private equity group EQT with a price tag of up to 1 billion euros ($1.3 billion), Reuters reported. Spanish family-owned group Roca, Japan’s JS Group Corp. and Turkey’s Eczacibasi Holding, which has joined forces with private equity firm KKR, are all considering binding bids for Sanitec. Private equity groups Bain Capital, owner of Ideal Standard, and Nordic Capital, a long-term rival to EQT in the Scandinavian markets, have also gone through into the second round of the auction process, which is being conducted by UBS.

(Reuters) – Makers of toilets and taps are sizing up Finnish rival Sanitec, put on the block by private equity group EQT with a price tag of up to 1 billion euros ($1.3 billion), people familiar with the situation said.

 

Spanish family-owned group Roca, Japan’s JS Group Corporation and Turkey’s Eczacibasi Holding, which has joined forces with private equity firm KKR, are all considering binding bids for Sanitec.

 

Private equity groups Bain Capital, owner of Ideal Standard, and Nordic Capital, a long-term rival to EQT in the Scandinavian markets, have also gone through into the second round of the auction process, which is being conducted by UBS.

 

Nordic deal markets have continued to perform strongly in the first half of 2012, hosting some of Europe’s largest buyouts this year, including the sale of tools group Ahlsell to CVC and installation services group Bravida to Bain.

 

Sanitec has 19 production plants around Europe, making brands including Allia, Sphinx and Twyford, and aims to be leader or number 2 in markets in which it sells its bathroom products.

 

But the company hit a turbulent patch during the credit crisis and the economic downturn which stalled much of the construction work across Europe.

 

EQT was forced to give up a 22.5 percent stake in Sanitec to its lenders in 2009, who in return cut debt from 969 million million euros to 300 million euros. At the same time EQT put in 115 million euros of new equity to retain its 77.5 percent stake.

 

Since restructuring its finances, Sanitec’s performance has improved and it is targeting earnings growth in 2012.

 

Sanitec is forecasting earnings before interest, tax, amortisation and depreciation (EBITDA) will about 15 percent to 120 million euros in 2012, one of the people said.

 

The company could command a multiple of seven to eight times earnings in a sale, though the its troubled past might depress the price prospective buyers are willing to offer, another person said.

 

Binding bids are expected to be lodged in late June or early July.

 

Sanitec net sales were 771 million euros in 2011, according to EQT’s website.

 

All the companies and private equity firms named either declined to comment or could not be reached for comment. (By Sven Nordenstam and Simon Meads)