Bain in $1.8bn kitchen and bath deal

Bain’s portfolio of household-name retail brands is poised for growth with a $1.8 billion agreement to acquire American Standard’s kitchen and bath division.

Manufacturing giant American Standard has agreed to sell one of its three divisions, Bath and Kitchen, to Bain Capital in an all-cash, $1.8 billion (€1.3 billion) deal.

Bath and Kitchen employs 26,000 workers at 54 production facilities worldwide. Bathtubs, toilets and sinks under the American Standard, Ideal Standard, Porcher, Jado and Ceramica Dolomite brands are among the products/brands manufactured by the division, which posted $2.4 billion in sales last year.

Steve Barnes, a Boston-based Bain managing director, and Walid Sarkis, a London-based Bain managing director, praised the company’s management team, strong brands and dedicated employees in a statement.

The sale is expected to close in the fourth quarter, and is subject to regulatory approvals and customary closing conditions. Shareholder approval is not required.

American Standard will use the proceeds to repurchase common stock and reduce debt, the statement said. In February, the company announced plans to spin-off all but its largest business, its Air Conditioning Systems and Services division.

Bank of America and Credit Suisse are financing the deal. Lazard advised American Standard, while Skadden Arps provided legal counsel. Lehman Brothers advised Bain, with Kirkland & Ellis acting as legal counsel and PricewaterhouseCoopers providing transaction advisory services.

Bain’s portfolio includes a diverse array of household-name retail brands including donut chain Dunkin’ Brands, mattress company Sealy, toy chain Toys “R” Us, craft retailer Michaels Stores, fast food chain Burger King, luggage maker Samsonite and office supply chain Staples.