KKR launches sale of $2bn German coffee machine maker
FRANKFURT, December 5, 2015
Buyout firm KKR is launching preparations to divest German tableware and coffee machine maker WMF in a potential 1.8 billion euro ($2 billion) deal, taking advantage of high equity prices, people familiar with the matter said.
The private equity firm is working with Citi and Deutsche Bank to explore possible options, which include a sale as a whole or in parts as well as a stock market listing, they added.
The actual divestment process is expected to kick off late in the first quarter of 2016, they said.
KKR and the banks declined to comment, while WMF was not available for comment.
WMF, or Wuerttembergische Metallwarenfabrik, makes cutlery, pots and pans for consumers, accounting for just below two thirds of its 1 billion euros in annual sales, as well as high-end coffee machines mainly for cafes and restaurants.
The company, founded in 1853 as a metal workshop for silver plated cutlery, banks on its "Made in Germany" image and employs 6,000 people at more than 40 locations worldwide.
WMF is expected to post earnings before interest, taxes, depreciation, and amortization of about 150 million euros in 2016 and could be valued at up to 12 times that amount in a potential sale, the people said.
While KKR will talk to WMF peers as well as other buyout groups interested in the company as a whole, it may opt for breaking the business up if that is likely to fetch a higher price, the sources said.
WMF's highly profitable offerings for gastronomy firms are likely to attract interest mainly in Europe, while its consumer tableware brand -- considered luxury in China and proving increasingly popular with the country's growing middle class -- may draw Asian bidders.
KKR bought a majority stake in WMF in 2012 from private equity firm Capvis in a deal valuing the group at roughly 600 million euros. It later acquired the remaining shares, and earlier this year delisted the company from the stock exchange.-Reuters
