HSBC Private Equity sells Caradon’s shower unit

Kohler, the US bathroom product manufacturer, has bought Caradon’s shower business for £301m.

HSBC Private Equity’s investment in Caradon Plumbing seems to be going according to plan. The private equity subsidiary of HSBC Holdings announced today the sale of Mira, Caradon’s shower products division, to Kohler Corporation of the US for £301m.

HSBC, which acquired Caradon in November 2000 for £420m, has now sold two of Caradon’s five business units. Earlier this year the firm disposed of Twyford Bathrooms to Sanitec Plc for £84m.

HSBC says the sales, alongside savings resulting from improved working capital management, mean that it has already recouped its initial investment in Caradon, which is run by Trevor Harvey.

The remaining assets, comprising of Caradon’s boiler and radiator units, are likely to remain under HSBC’s ownership for some time.

“The heating businesses are a good long-term play, and we are probably going to hold them for the duration”, HSBC’s head of UK investment Phil Goodwin told PEO. “It’s an active sector, and we’ve been offered some attractive acquistion opportunities in Europe.”

Caradon Plumbing was advised by Credit Suisse First Boston, Eversheds and Ernst & Young. Kohler Corporation was advised by Andersen and Cleary, Gottlieb, Steen & Hamilton.