Coffee Machine maker WMF Draws Strategic Investor’s Interest

KKR has launched the sale of coffee machine maker WMF in a deal potentially worth 1.5 billion euros ($1.7 billion), with interest from household appliances makers and private equity groups, several sources familiar with the matter said.

The company makes high-end coffee machines mainly for cafes and restaurants as well as cutlery, pots and pans for retail consumers and brings in annual revenue of about 1 billion euros.

France’s Groupe SEB, which owns the Moulinex brand, will bid as will Italy’s De Longhi, the sources said.

China’s Haier and U.S.-based Middleby are also expected to make an offer, while China’s Midea and Japan’s Panasonic have decided against bidding.

It remained unclear if Sweden’s Electrolux would bid, the sources said.

Separately, buyout groups Advent, Bain, Bridgepoint, Cinven, BC Partners, Apax will hand in offers, the sources said.

SEB, Haier and Middleby were not immediately available for comment. All the other companies declined to comment.

The WMF sale may revive the German buyout market, which has seen a lull since the start of the year.

“WMF is a well-known brand and there are only a few assets of this size on the market, so we will see a large number of bidders in the first round,” one person familiar with the deal said, saying information packages went to about 40 potential buyers.

WMF, or Wuerttembergische Metallwarenfabrik, is expecting to post adjusted annual core earnings (EBITDA) of 150 million euros this year and KKR is hoping to fetch 10 times that, several people familiar with the matter said.

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“Bidders are offering 10 times for the coffee machines, but only 5 to 6 times for the rest,” one of the sources said.

WMF’s highly profitable offerings for gastronomy firms have caught the eye of European peers, though they are not interested in the cutlery products.

“Some of the household appliances groups have started to talk to private equity groups about forming consortiums and breaking up WMF after the sale,” one of the people said.

Initial plans to list the company on the stock market have been put on ice.

Thomson Reuters league tables show overall mergers and acquisitions activity with German involvement rose 64 percent in the first quarter, though most of that was due to the Deutsche Boerse and LSE deal. Mid-market deal activity fell 83 percent.

“Many deals are in the works but have hit some delay over market jitters,” an M&A banker said.

Among other deals, 3i has launched the sale of its Amor jewellery chain with the help of DC Advisory. Capvis and HgCapital are selling sealings maker SFC Koenig with the help of advisor Baird while Bavaria Industries is looking for a buyer for carparts maker Tristone, advised by William Blair, sources familiar with those transactions said.

Source – reuters

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