Joining the ranks of Europe’s biggest manufacturers of bathroom products, Villeroy & Boch AG has signed binding agreements to acquire operating companies in the Ideal Standard Group. Here’s what we know…
Villeroy & Boch and Ideal Standard are a strong strategic fit given their regional presence, sales strategies and product and brand portfolios, laying the foundations for a stronger market position and additional growth. In an industry with global growth potential, the integrated company will, after completion of the transaction, join the ranks of Europe’s biggest manufacturers of bathroom products. The Ideal Standard shares are being sold by corporations under the management of Anchorage Capital Group and CVC Credit. The acquisition price is based on a company valuation of approximately € 600 million.
The revenue of the Villeroy & Boch Bathroom & Wellness Division will double to € 1.4 billion as a result of the merger. Including the Dining & Lifestyle business, this represents an increase to over 1.7 billion euros (around € 995 million in the 2022 financial year) for the Group as a whole.
“This merger means that we will now catch up with the largest players on the European market in the bathroom sector in terms of turnover,” explains Frank Göring, CEO of Villeroy & Boch. “Our complementary strengths also make us more competitive and significantly improve our starting position for achieving additional growth.”
Image credit: Villeroy & Boch
The merger will create a powerful combination of complementary established brand and sales strategies. Villeroy & Boch has a strong geographical basis in Central and Northern Europe as well as Asia, while Ideal Standard enjoys an excellent reputation with its brand portfolio in the UK, Italy and the Middle East / North Africa region in particular.
While Villeroy & Boch’s sales strategy focuses primarily on a high-end private customer base, Ideal Standard possesses particular expertise in the project business, including for the public sector, the healthcare sector and for developers of large residential, hotel and commercial properties. In addition, alongside a broad range of ceramic bathroom ware and other products, Ideal Standard comes with an established fittings business, which generated more than a third of its revenue last financial year.
“Villeroy & Boch and Ideal Standard complement each other, in terms of products but also in terms of brands, and will gain mutual benefit from their different sales channels,” continued Jan Peter Tewes, Ideal Standard CEO. “Both companies will play a key role in charting the future course of the industry. We look forward to this development!”
In addition to the strategic fit, Frank Göring pointed to the cultural similarities between Villeroy & Boch and Ideal Standard. “We are characterised by strong brands steeped in tradition and share similar values,” said Göring. “These include a pronounced service orientation, a flair for good design and a constant striving for innovation. We are delighted that the employees of Ideal Standard will become part of our global organisation after the closing of the transaction. Our clients will benefit from this combined expertise and an expanded offering.”
“The bathrooms sector remains a fast-moving global growth market, but it is a market in which scale effects will be increasingly important to remaining competitive and attracting future investment,” stated Andreas Schmid, Chairman of the Supervisory Board at Villeroy & Boch. “For this reason alone, the acquisition represents the right strategic step for Villeroy & Boch. In addition, Ideal Standard is an excellent extension to our own business model. This heralds a new era for the Bathroom & Wellness Division and for Villeroy & Boch as a whole.”
With this merger, Villeroy & Boch is not only elevating its bathrooms business to a new level in terms of volume, but is also gaining access to significant additional growth potential. Ideal Standard’s manufacturing base in the fittings business, expertise in the project business and strong market positions in the UK, MENA and Italy will grant Villeroy & Boch improved market penetration and coverage of specific regions and product segments.
With these long-standing brands combining their strengths, it will be interesting to see what this means for future collections and the role of designer Robert Palomba as Ideal Standard’s Chief Design Officer, along with the path forward for ethical and conscious manufacturing in the industry more broadly, which Hotel Designs’ explored in Venice with Ideal Standard earlier this year.
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Main image credit: Villeroy & Boch
