De Dietrich Remeha Group and Baxi Group 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.
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.
De Dietrich Remeha Group and Baxi Group will now enter into discussions with their respective debt providers to enable this transaction to take place, although at this early stage this is by no means guaranteed.
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."
Further discussions are expected to take place over the next few weeks.
