Whirlpool Corporation has bought Emerson-owned InSinkErator for $3bn (£2.5bn).
While InSinkErator, which claims to be the world’s largest manufacturer of food waste disposers and instant hot water taps, will become part of the Whirlpool company. The new owner says it will operate in the USA as a separate business, with its headquarters remaining in Mount Pleasant, Wisconsin.
Established in 1938, InSinkErator is said to hold a 70% share in the global food waste disposal market.
Marc Bitzer, chairman and CEO of Whirlpool Corporation, said: “We are excited for the unique opportunity to add InSinkErator to our portfolio of leading brands. The acquisition is a clear accelerator of our ongoing portfolio transformation and aligned with our stated goals of investing in high-growth and high-margin businesses.
“InSinkErator is not only an iconic brand with a reputation for the highest quality and performance but also a business that is purpose-driven and shares our vision of improving life at home. We look forward to capitalising on the significant growth opportunities we see for this business.”
The sale will close on September 30, 2022, after the deal is subject to regulatory approvals. Whirlpool Corporation says it plans to initially fund the acquisition through available liquidity, with new debt later.
In the 12 months to March 31 this year, InSinkErator saw revenues of $595m (£491m, with pre-tax profits of $148m (£122m). Whirlpool says the company is expected to generate sales of approximately $650m (£536m) by September 30, 2022.
The move is an interesting one for Whirlpool who, in the UK, predominantly operates in the entry to mid-market with the Hotpoint and Indesit brands. From a premium kitchen studio perspective, its main brand is KitchenAid which has not had anywhere near a market penetration proportionate to the size of its parent company.
The ownership of InSinkErator may give Whirlpool the foot in the independent retailer’s showroom door it needs to crack that market.