Villeroy & Boch acquires Ideal Standard and becomes one of Europe's largest manufacturers of bathroom products

In a sector with global growth potential, the integrated company will, upon completion of the transaction, become one of Europe's largest manufacturers of bathroom products. Ideal Standard shares are sold by companies managed by Anchorage Capital Group and CVC Credit. The amount of the transaction is estimated at around 600 million euros.

Following the merger, the turnover of the “Bathroom and Well-being” division of Villeroy & Boch will double to 1,4 billion euros. Including the Dining & Lifestyle business, this represents an increase to more than €1,7 billion (approximately €995 million for the 2022 financial year) for the entire group.

For Frank Göring, CEO of Villeroy & Boch: “This merger will make us one of the largest players in the European market in terms of turnover. Thanks to the complementarity of our strengths, we are strengthening our competitiveness and significantly improving our position in order to stimulate our growth. »

A regional presence, distribution channels and complementary catalogs

This merger allows for the close integration of well-established and complementary brand and distribution strategies. Villeroy & Boch is well established in Central and Northern Europe as well as Asia, while Ideal Standard enjoys an excellent reputation with its brand portfolio in the UK, Italy and the Middle East region. /North Africa in particular. While Villeroy & Boch's sales strategy primarily focuses on high-end private clients, Ideal Standard has particular expertise in the field of projects, particularly for the public sector, the healthcare sector and developers of large developments. residential, hotel and commercial. Additionally, in addition to a wide range of ceramic bathroomware and other products, Ideal Standard has a well-established tapware business, which generated more than a third of its turnover during of the previous financial year.

For Jan Peter Tewes, CEO of Ideal Standard: “Villeroy & Boch and Ideal Standard complement each other in terms of products and brands, and will mutually benefit from their different sales channels. Both companies will play a key role in the future direction of the sector. We are delighted with this development! »

In addition to the strategic complementarity, Frank Göring highlights the cultural similarities between Villeroy & Boch and Ideal Standard: “We are distinguished by strong brands, anchored in tradition, and we share similar values, notably a strong orientation towards service, a sense of acute design and a constant desire for innovation. We are excited to have Ideal Standard employees join our global organization once the transaction closes. Our customers will benefit from this combined expertise and an expanded offering.”

New expertise opens up growth prospects

This merger not only allows Villeroy & Boch to boost its bathroom activities quantitatively, but also offers it enormous additional growth prospects.

The skills brought by Ideal Standard in the field of taps, its expertise in project execution and its significant market shares in the United Kingdom, Italy and the MENA region will enable Villeroy & Boch to improve its penetration of the market and strengthen its presence in certain regions and in different product segments. These long-standing brands are now joining forces.

For Andreas Schmid, Chairman of the Supervisory Board of Villeroy & Boch: “The bathroom sector remains a growing global market, but it is a market where economies of scale will play an increasingly decisive role in competitiveness and long-term investment. For this reason alone, this acquisition represents the right strategic step for Villeroy & Boch. Furthermore, Ideal Standard perfectly complements our business model. This is the start of a new era for the Bathroom and Wellness division and for Villeroy & Boch as a whole. »

A prudent financial transaction

Villeroy & Boch will finance the transaction using its existing liquidity and a loan of approximately 250 million euros. The transaction is subject to customary regulatory reviews and approvals as well as the repayment of the €325 million bond issued by Ideal Standard International SA. Unlike the usual pension and other obligations linked to operational activities, the bond issue and various financial liabilities are not part of the transaction.

For Dr Markus Warncke, CFO of Villeroy & Boch: “The merger is taking place on the basis of a solid financing structure. Existing loans taken out by the seller are also not part of the scope of the transaction and will not be taken over by Villeroy & Boch at closing. »

The transaction is expected to be finalized in early 2024.

Deutsche Bank AG acted as financial advisor and White & Case acted as legal advisor to Ideal Standard.