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23rd June 2017
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Geberit announces offer to acquire bathroom ceramics giant, Sanitec
Geberit has this week announced a tender offer to acquire Sanitec, the Scandinavian-based bathroom ceramics specialist.
Sanitec enjoyed net sales of EUR 702 million in 2013 with an earnings before interest and taxes margin of 9.7%. The company has 6,200 employees worldwide, 18 production facilities and 24 sales units in Europe. Best known in the UK for Twyford, it practices a multi-brand strategy with 14 leading brands operating in Europe on a local basis.
As a European market leader in the field of sanitary technology, the Geberit Group is a global provider with sales of CHF 2.3 billion. It employs 6,300 people in 41 countries around the world.
All elements of the integration and target organisation will be developed jointly with representatives from both companies.
For Geberit, the merger with Sanitec represents an expansion of its strategic focus. The future product offerings will be enhanced with bathroom ceramics. Geberit says the new company will be the market leader for sanitary products in Europe, combining behind-the-wall technical know-how with in-front-of-the-wall design competence. Geberit says it is excited about the prospect of collaborating with Sanitec's professional and knowledgeable staff to extract the expected significant benefits from the combination of the two companies.
"This transaction will make us the leader in the sanitary products industry and expand the addressable market for Geberit," said Geberit CEO and chairman of the board of directors Albert M. Baehny.
"We will strengthen our access to end consumers and our presence in showrooms.
"These aspects are crucial, especially in those markets where end consumers are the key decision-makers.
"The transaction is a promising union of leading brands in the areas of sanitary technology and bathroom ceramics. The outstanding reputation of both companies for product quality and reliability, service and innovation combined with strong brands make this combination a perfect match."
Geberit AG is making an offer to Sanitec's shareholders to acquire their shares at a price of SEK 97 each, corresponding to a total transaction value of CHF 1.29 billion for 100% of the shares. The offer represents a premium of 29% compared to the volume weighted average trading price of the Sanitec shares on the Stockholm Stock Exchange over the past three months. The merger is being completely financed by Geberit using its own funds, as well as by new debt to be taken on. The offer is subject to customary conditions including an acceptance rate in excess of 90% of the shares and clearance from relevant merger control authorities.
The committee made up by those of Sanitec's board members who do not represent shareholders and who have undertaken to accept the offer, has unanimously recommended Sanitec's shareholders to accept the offer - a corresponding recommendation was released by Sanitec this week. In addition, the two largest shareholders of Sanitec, EQT and Zeres Capital, jointly holding 25.5% of the Sanitec shares, have given irrevocable undertakings to accept the offer for all of their shares.
According to a pro forma calculation based on 2013 figures and not taking into account the merits of the combination, the combined company generated net sales of roughly CHF 2.9 billion with an operating profit (EBIT) of just under CHF 600 million, corresponding to an EBIT margin of about 21%. Net income was just under CHF 500 million, which corresponds to a return on sales of approximately 17%.
17th October 2014