De Dietrich Remeha Group and Baxi Group announce that they have entered into detailed discussions to form a new group company that will have a leading position in the European heating market.
The complementary geographic profile of De Dietrich Remeha Group and Baxi Group will put the new company in a leading position in all Western European countries, with strong positions in the rapidly growing markets of Eastern Europe, Turkey, Russia, North America and China. The combined business would have pro forma revenues of €1800 million, EBITDA of over €225m and 6400 employees (base actual 2008).
The transaction is intended to be structured as a share for share transaction in which Baxi Group's shareholders (funds advised by BC Partners and by Electra Partners), will invest around €100 million in additional equity in the new group as minority partners with the Remeha Group B.V. holding the majority.
To enable this transaction to take place, De Dietrich Remeha Group and Baxi Group will enter into discussions with their respective debt providers to retain in full and amend the financing arrangements of the two companies to allow debt providers also to benefit from the significant credit enhancement associated with the proposed combination.
The discussions with De Dietrich Remeha Group and the debt providers respectively may or may not result in a transaction with De Dietrich Remeha Group and agreement with the debt providers. No assurance is given in this respect.
Rob van Banning, CEO of De Dietrich Remeha Group, said: "Whilst both De Dietrich Remeha Group and Baxi Group have leading European positions, this combination will through its complementary geographic strengths and entrepreneurial culture create a new group that is a true leader in European heating with further potential in other geographies. Cost synergies can be created through implementing best in class technological platforms, optimizing purchasing and efficient operations supporting the customers and employees of our two organizations. This would be a significant next step in De Dietrich Remeha Group's successful growth strategy over the past 8 years”.
Martyn Coffey, CEO of Baxi Group, said: "There is a strong industrial logic to combining De Dietrich Remeha Group and Baxi Group, particularly in the context of today's global economic uncertainties and difficult financing markets. The opportunity to exploit the increased scale and complementary position of the combination is significant. If this transaction completes, then together with the new funds invested by our shareholders, it will transform our capital structure and will be very positive for the business, our employees and for our existing customers. I am particularly excited that this transaction would confirm our technological leadership in the emerging low carbon micro combined heat and power sector”.
Andrew Newington, Managing Partner at BC Partners and Chairman of Baxi Group, said: "We are delighted to have an opportunity to invest behind the creation of this new group. This is a great example of how private equity can act as a long term shareholder supporting the strategic initiatives of investee companies, and we hope that all stakeholders will share our enthusiasm for the proposed transaction”.
De Dietrich Remeha Group and Baxi Group expect to advance discussions over the next few weeks and hope to make a further announcement before summer 2009. There is no certainty that these discussions will lead to a transaction.
De Dietrich Remeha Group is one of Europe's innovative leaders (ranking Europe's no. 7 in size) in heating and hot water equipment. Focused on multi-energy systems saving energy and protecting the environment, the company has grown rapidly due to the strength of its distribution and installers' network in France, The Netherlands, UK, Germany, Belgium and Poland as well as in export. Its growing success in the market of renewable energies as well as the innovative condensing gas boilers developed by Remeha, (pioneer in this area, as today in the field of micro-cogeneration) have supported this expansion strongly. The group operates under the brand names De Dietrich, Oertli, Remeha, Serv'elite and Sofath. Its production sites are located in Apeldoorn (NL), Mertzwiller, Niederbronn and Portes-les-Valence (FR). The group achieved a turnover of € 615 million in 2008 and employs 2,200 people. De Dietrich Remeha Group is 100% owned by Remeha Group B.V. with the headquarters in The Netherlands.
Baxi Group is Europe's 4th biggest manufacturers and distributors of domestic and commercial water and space heating systems. It is headquartered in the UK and employs more than 4,200 people across Europe with a turnover exceeding €1.2 billion. Baxi Group owns and sells some of the leading brands in the European market for heating products. These include the Baxi brand in the UK, Italy, Turkey, Russia and a number of East European markets; Heatrae Sadia and Potterton in the UK, Chappée and Ideal Standard in France, BaxiRoca in Spain, Broetje in Germany and Baymak in Turkey. In addition to manufacturing high efficiency condensing boilers, Baxi Group is committed to new heating technologies that will play a role in tackling climate change. It already sells the world's leading mini combined heat and power (CHP) unit and has a well developed range of domestic biomass and solid fuel boilers, solar and heat pump products and is developing
microCHP boilers for domestic installations.
For De Dietrich Remeha:
Mrs Marleen Suurd
Tel. +31 55 549 62 01
For Baxi Group and BC Partners:
Mr Richard Spiegelberg
Cardew Group
Tel: +44 20 7930 0777
