Lux Groups Holdings’ acquisition of Poggenpohl has been thrown into turmoil by a last-gasp audacious bid from Chinese bathroom giant Jomoo Group.
German administrator Manuel Sack released a statement this morning saying that Jomoo Germany, a subsidiary of the Chinese Jomoo Group has signed a contract on Friday (July 10) for an undisclosed sum. However, the contract will not take effect for a few weeks and the business will continue to be run by administrators.
This may mean a legal challenge from Lux, who teamed up with tech entrepreneur Wolf Family Office to buy the failing German brand, who said it was “a sad day for Poggenpohl, and for Germany”.
Jomoo Group says it is “committed to Poggenpohl’s production site in Herford and will take over a large part of the company’s workforce.” Poggenpohl CEO Gernot Mang will continue to head the company under Jomoo.
The administrator’s statement does confirm that, as far as it is concerned, the Lux Group deal is dead by saying “a recently announced purchase by another investor did not come about”.
Xiaowei Lin, general manager of Jomoo Germany said: “As a critical part of Jomoo’s long term sustainable market and product strategy, we value the need to cover well the high end and premium market segment. We have seriously considered the opportunity to work with or acquire an established brand with high quality and design reputation for a while. Such a brand should preferably have a long-standing history, well-known around the world and be well respected with a reputation for craftsmanship and excellence. Poggenpohl meets such criteria and fits nicely into Jomoo’s market strategy in expanding its kitchen ware and cabinet offering.”
However, Lux and Wolf Family Office are contending that they have been gazumped as their pen hovered above the dotted line on an agreed deal.
“[We] were pleased to have concluded a deal for the purchase of Poggenpohl GMBH with Mr. Manuel Sack, a partner at the law office of Brinkmann and Partner,” it says in a statement.
“This deal was concluded after a robust [mergers and acquisitions] process and an asset and purchase agreement, negotiated and finalised with PWC and their lawyers. The parties had planned to sign the deal early last week and the Lux/Wolf team was ready, willing, and able to have its notary host the seller at signing. Funds to consummate the deal were sequestered and the contracts were ready for signature by the parties.
“At the midnight hour a decision was made by the seller to allow another investor to make a last-minute bid for the company and extend the time to closing.”
However, they do not say that the deal is over, simply that it “cannot be finalised at this juncture”.
“The transformation of Poggenpohl might not happen as it appears that a decision was made to allow the process to be extended,” they say. “We believe this is a sad day for Poggenpohl, and for Germany, as this uber brand will continue to face major structural challenges.
“Without a sophisticated approach to re-engineering the Poggenpohl enterprise, there will be a day of reckoning that will mirror the past. Lux Group and the Wolf Family Office are still committed to concluding our Tesla digital transformation of this industry and we look forward to other opportunities with willing partners and their respective employees.”
Who is Jomoo?
Jomoo is 100% private owned with headquarters located in Xiamen, Fujian Province on the South East-coast of China. The Group has manufacturing footprints in strategic locations in China, a total workforce of 14,500 and annual sales volume reaching €1.7bn euro. It owns a national network of 5,000 distributors and close to 4,000 shops and showrooms in all regions and cities across China.
Its international presence has also been growing significantly with increasing exports to key customers in North America, Europe, Asia and the Middle East and offices set up in different regions including Munich, Germany. The Group says it has an ambitious growth plan both domestically and internationally through continuous product, brand, market and channel differentiation.