Electrolux Professional revealed yesterday that it has agreed to buy commercial catering equipment manufacturer Unified Brands in a deal worth £180m.
The acquisition is the largest that the business has made since becoming a standalone entity following its spin-off from the Electrolux Group.
Unified Brands will be well-known to those with close links to the North American market, but perhaps less so for those who don’t follow events in that part of the world quite so closely.
So what exactly has Electrolux Professional got for its money? Here, we take a look at the numbers…
£180m – that sounds a lot?
While it’s not in the same sort of league as the Ali Group- Welbilt deal (that runs into the billions of dollars), Unified Brands is still a significant player by any measure. Even after the disruption of Covid-19 and all the challenges facing catering equipment manufacturers, the business is still projected to do £100m of revenue this year and employs more than 600 staff. For context, Electrolux Professional is about a £600m business globally.
What sort of manufacturing capabilities does it have?
Georgia-based Unified Brands operates two manufacturing and R&D facilities – one in Michigan and one in Mississippi. Given Electrolux’s main motivation for the deal is to gain a stronger foothold in the US market, this deal gives it immediate access to a significant manufacturing bases from which to enhance its position.
What brands are important in this deal?
Electrolux will gain access to a five brands that are well-entrenched in the US market. Its own business model is centred on providing customers with a ‘complete’ kitchen solution – meaning cooking, refrigeration, warewashing and beverage – and Unified Brands’ structure fits this profile. Here’s a breakdown of the brands in question:
Groen: Wide range of cooking equipment, including braising pans, steam jacketed kettles, convection steamers and combi ovens.
Randell: Established range of foodservice refrigeration, including prep stations, modular counters, serving lines, blast chillers and undercounter refrigeration.
Avtec: Ventilation systems, conveyors and utility distribution solutions.
CapKold: Specialist line of sous vide systems, cook-chill systems, pump/fill stations and band sealers.
Power Soak: Innovative wash systems specifically developed for demanding commercial kitchens.
What are the implications for the UK?
It’s far too early to tell. Electrolux has a history of bringing technology that it has acquired or developed in Europe to the UK, but it has made it clear that the main rationale for this acquisition is to improve its position in the US market. With the likes of Middleby and Ali Group driving consolidation in that part of the world, Electrolux needed to make a statement in order to avoid losing ground. Once the acquisition is bedded down, however, it’s certainly conceivable that it could look to introduce the technologies it has inherited into markets where they fit a gap, including the UK.
How is Electrolux paying for the deal?
The acquisition is financed by internal funds and existing bank and credit lines. The company says that the net debt/EBITDA ratio after the acquisition is not expected to be above the company target of 2.5x.