Date Announced: 09/26/2013
client: LIXIL Corporation
Status: Closed – 01/2014
Value: €3.1 billion Read the case study
On September 26, 2013, LIXIL Corporation (“LIXIL”) and Development Bank of Japan (“DBJ”) agreed to acquire an 87.5% equity interest in Grohe Group S.a.r.l, Europe’s largest and the world’s leading single-brand manufacturer of premium sanitary fittings, from private equity funds managed by TPG Capital and DLJ Merchant Banking Partners. The transaction represents a significant step in the successful implementation of LIXIL’s strategy to become the global leader in the building materials and housing equipment industry. With an implied Enterprise Value of €3.1 billion ($4.1 billion), this is the largest ever German investment by a Japanese company and the largest cross-border acquisition by a Japanese corporate in 2013. The combined sanitary businesses of both groups generate more than €4 billion of annual revenue, making it the largest player in its industry. In the three months following announcement, LIXIL’s share price significantly outperformed both its peers and the markets (+33% by December 17, 2013). The transaction was successfully completed in January 2014.
Moelis & Company and SMBC Nikko acted as financial advisors to LIXIL. Moelis & Company provided effective tactical advice in a very competitive and complex cross–border dual track IPO and M&A process driven by private equity sellers. The off-balance sheet acquisition structure featuring a non-recourse loan from three Japanese banks (including SMBC) was arranged by SMBC Nikko and enables LIXIL to act on this strategic opportunity while maintaining its current leverage level and the financial flexibility to pursue other strategic opportunities as they arise. This transaction represents one of the largest joint Moelis & Company/SMBC Nikko mandates since the establishment of our alliance in March 2011.