Advent, Bain, TPG, others drawn to Whirlpool India
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Advent International, Bain Capital, TPG, EQT, Carlyle and KKR are among private equity funds that have been sounded out on buying into Whirlpool's India business as the US parent looks to pare its stake in the listed subsidiary, said people aware of the matter.Whirlpool Corp. is looking to sell a 31% stake in Whirlpool of India Ltd , which generates 85% of its Asia revenue, while retaining a 20% holding, they said. It's looking to raise net cash proceeds of $550-600 million (Rs 4,684-5,110 crore) from the transaction. A formal stake sale process was launched earlier this month by the company's advisor Goldman Sachs.The executives said the deal could involve two funds jointly acquiring the stake, since Whirlpool Corp. has indicated it wants to remain the largest shareholder in the Indian arm. An entity getting a stake of 26% or more would also trigger an open offer. However, most of the buyout funds are keen on getting a controlling stake.Talks are in the initial stage with management meetings just kicking off. Many of the funds have started the process of roping in industry advisors.Several PE funds that are in the fray for a stake in Haier India will also be keen to evaluate the Whirlpool option. TPG, Warburg Pincus, Goldman Sachs and GIC of Singapore are in that race, along with the family offices of leading Indian industrialists, ET reported on Monday.PE funds have previously backed homegrown consumer appliance brands. Advent took control of CG Consumer along with Temasek and made a successful exit through the markets. They still are the controlling shareholders of Eureka Forbes , which was acquired from the cash-strapped SP Group.Whirlpool India stocks fell after the parent announced the decision to reduce its holding to a minority stake on January 30 — to a 52-week low of Rs 899 on March 3 from Rs 1,577 on January 29. It closed at Rs 1,199.35 on Monday on the BSE for a market value of Rs 15,216.4 crore.The parent had sold a 24.7% stake in the Indian unit in February 2024 through block deals for Rs 4,039 crore. The buyers had included SBI Mutual Fund, Aditya Birla Sunlife Mutual Fund, and one foreign institutional investor Societe Generale.Among the first MNC electronic brands to enter India in late 1980s, Whirlpool hasn't been able to scale up as much as rivals LG, Samsung and Haier, which entered much later, or even homegrown brands such as Voltas and Havells-owned Lloyd.'Whirlpool Corp. has informed them they want the Indian entity to carve out its own future without much interference and hence reducing their stake to a minority,' a senior industry executive said. 'This makes it interesting for private equity funds to take control, build the business, which has been lagging compared to its peers like LG and Samsung, and increase its valuation.'The US company's chief financial and administrative officer James W Peters told analysts on Thursday night that the India transaction has 'generated significant interest from large third-party investors'. He said the company expects cash generated by the transaction in the second half of 2025. The parent intends to repay or refinance debt with this money as it had done the last time.Whirlpool Corp. didn't respond to queries. Carlyle, Advent International, TPG, EQT Group and KKR declined to comment.The US parent had earlier said the reduction of its shareholding will result in 'increased autonomy' at the Indian unit, allow it to focus on accelerated growth, and utilise its well-funded business to invest further.Peters said in February that Whirlpool is not looking for a 'strategic buyer' for its shares in the Indian unit.'A strategic transaction with another player would not make sense at this time because it would… not be as value-creating as it is for us to provide the brand and the technology over the long term,' he had said, adding that a deal would free up Indian management. 'This will put decision-making completely in their hands without the oversight of Whirlpool that has to balance the needs of US shareholders and Indian shareholders.'The company clocked sales of Rs 6,332 crore and net profit of Rs 167 crore in FY24. In the nine months ended December 2024, revenue from operations rose 17% to Rs 5,530 crore from the year earlier. LG India posted FY24 sales of Rs 21,557 crore and net profit of Rs 1,511 crore. Voltas posted sales of Rs 8,687 crore and net profit of Rs 604 crore in the same period.In the March quarter, Asia accounted for 7.4% of Whirlpool Corp.'s global sales of $3.6 billion and 9% of global ebit of $214 million.'With the parent planning to sell 31% stake in the company, there is a possibility of multiple scenarios which may or may not be favourable for minority shareholders,' said Aniruddha Joshi of ICICI Securities.
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