Villeroy & Boch has signed a deal to acquire Ideal Standard in a move it says will see the combined company rank as one of Europe’s largest manufacturers of bathroom products. The acquisition price is said to be based on a company valuation of around €600 million (£517m).
Villeroy & Boch says that the two companies are a strong strategic fit in terms of their regional presence, sales strategies and product and brand portfolios. The Ideal Standard shares are being sold under the management of Anchorage Capital Group and CVC Credit.
As a result of the acquisition, Villeroy & Boch says that it will double the revenue of its Bathroom and Wellness Division to €1.4 billion, and including the Dining and Lifestyle business this represents an increase to over €1.7bn.
Commenting on the deal, Villeroy & Boch chief executive Frank Göring said: “This acquistion means that we will now catch up with the largest players on the European market in the bathroom sector in terms of turnover Our complementary strengths also make us more competitive and significantly improve our starting position for achieving additional growth.”
The acquisition will create a combination of complementary established brand and sales strategies. Villeroy & Boch has a strong base in central and northern Europe and Asia, while Ideal Standard has a good record in the UK, Italy, the Middle East and North Africa.
And while Villeroy & Boch focuses primarily on a high-end private customer base, Ideal Standard has expertise in the project business, including public sector, healthcare, hotel and commercial and large residential developers.
In addition to its bathroom ceramicware business, Ideal Standard also has an established fittings business that accounted for more than one third of its revenue in the past financial year.
Ideal Standard chief executive Jan Peter Tewes added: “Villeroy & Boch and Ideal Standard complement each other, in terms of products but also in terms of brands, and will gain mutual benefit from their different sales channels. Both companies will play a key role in charting the future course of the industry. We look forward to this development.”
As a result of the acquisition, Villeroy & Boch says that it will be raising its bathroom business “to a new level” in terms of volume and will gain significant growth potential.
Villeroy & Boch will benefit from Ideal Standard’s manufacturing base in fittings and expertise in the contracts market and will improve its coverage of the UK, Italy and MENA regions.
Andreas Schmid, chairman of the supervisory board at Villeroy & Boch, added: “The bathrooms sector remains a fast-moving global growth market, but it is a market in which scale effects will be increasingly important to remaining competitive and attracting future investment. For this reason alone, the acquisition represents the right strategic step for Villeroy & Boch. In addition, Ideal Standard is an excellent extension to our own business model. This heralds a new era for the Bathroom and Wellness Division and for Villeroy & Boch as a whole.”
The acquisition is being financed from Villeroy & Boch’s own funds plus borrowing of €250m. Subject to the usual regulatory reviews, the transaction is expected to complete in early 2024.
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