American Standard Companies Inc. today
announced that it has signed a definitive agreement to sell the company's
worldwide Bath and Kitchen products business to funds advised by Bain Capital
Partners, LLC, a leading global private investment firm, for $1.755 billion in
cash. Upon completion of the sale, Bain Capital
will acquire all of American Standard's Bath and Kitchen business with 2006
annual sales of $2.4 billion, 26, 000 employees and 54 production facilities in
23 countries worldwide.
American Standard Companies Inc. today
announced that it has signed a definitive agreement to sell the company's
worldwide Bath and Kitchen products business to funds advised by Bain Capital
Partners, LLC, a leading global private investment firm, for $1.755 billion in
cash.
Upon completion of the sale, Bain Capital
will acquire all of American Standard's Bath and Kitchen business with 2006
annual sales of $2.4 billion, 26,000 employees and 54 production facilities in
23 countries worldwide. The business manufactures and markets industry-leading
products under brand names such as American Standard®, Ideal Standard®,
Armitage Shanks®, Porcher®, Jado®, Ceramica Dolomite® and Vidima®.
The sale closing is expected to occur early
in the fourth quarter. The company intends to use proceeds of the sale
primarily to repurchase common stock and reduce debt to keep the company at
investment-grade standards. The sale is subject to normal regulatory approvals
and customary closing conditions. Shareholder approval is not required. The
buyer has secured firm financing commitments.
On Feb. 1, 2007, American Standard announced
plans to separate its three businesses by selling Bath and Kitchen, spinning
off Vehicle Control Systems and retaining its largest business, Air
Conditioning Systems and Services. Today's announcement is the final step
needed for completion of those plans following the spinoff of Vehicle Control Systems
as an independent publicly traded company to be known as WABCO, which is
scheduled for July 31 at 11:59 p.m. EDT. In March, the company sold Venesta
Washroom Systems, which was part of Bath and Kitchen. Combined with Venesta,
proceeds for the sale of Bath and Kitchen total $1.92 billion.
Following the spinoff and the sale, American
Standard Companies will change its name to Trane. Trane is the flagship brand
of its global Air Conditioning Systems and Services business, which last year
generated sales of $6.8 billion. Trane will retain the American Standard brand
name for its heating, ventilating and air conditioning (HVAC) and related
products, while the newly formed Bath and Kitchen business will retain the name
for its markets.
"This is a major milestone in our plan
to separate American Standard into three focused, better understood
companies," said Fred Poses, American Standard chairman and CEO. "We
believe that Bain Capital's all-cash offer provides excellent value for our
shareowners. Bath and Kitchen is a global market leader, with size, global
reach and organizational talent. It has a rich history and a great future for
its customers, employees and new owners."
"This is a market-leading global company
with a wonderful heritage, a strong portfolio of brands, deep customer
relationships and an experienced management team," said Steve Barnes, a
managing director at Bain Capital based in Boston. " We look forward to
supporting the management team and dedicated employees in realizing the
company's full potential through continued operational improvements, further
enhancing and leveraging its strong family of brands, and accelerating
growth," added Walid Sarkis, a London-based managing director at Bain
Capital.
American Standard Companies is completing
plans to spin off WABCO. Regular trading of WABCO's common stock (WBC) is set
to begin Aug. 1 on the New York Stock Exchange. It is currently traded on a
"when issued" basis.
American Standard's financial advisor for the
Bath and Kitchen sale is Lazard. Its legal counsel is Skadden Arps. For Bain
Capital, Bank of America, N.A. and Credit Suisse provided financing, Lehman
Brothers acted as financial advisors, Kirkland & Ellis LLP served as legal
counsel, and PricewaterhouseCoopers provided transaction advisory services.