By Soma Biswas
However tepid deal making is these days compared with the heyday of 2007 it’s heating up in one surprising area: building products and consumer durables.
In August, Daikin Industries of Japan paid Hellman & Friedman $3.7 billion for Goodman Global, the company that makes Amana air conditioners and CD&R, a private equity firm, paid more than $1 billion for Wilsonart, a division of Illinois Tool Works that makes laminated surfaces, countertops and furniture.
Whatever the presidential candidates say about the US economy, one thing is clear: big companies here and abroad and shrewd private equity firms are putting their cash behind a US housing recovery based on the belief that
consumers and businesses will spend big on new homes, appliances and furniture.
Just in August and September the three biggest names in mattresses traded hands in two separate deals: Ares Management flipped Serta and Simmons together to Advent International for an undisclosed price while Tempur-Pedic (NYSE: TPX) picked up Sealy for $1.3 billion.
Just two weeks ago Spectrum Brands (NYSE: SPB), the company that makes Rayovac batteries and George Foreman grills, spent $1.4 billion on a division cast off by Stanley Black & Decker (NYSE:SWK) that sells Kwikset lock systems and Price Pfister faucets.
When I asked one New York-based investment banker why there are suddenly deals in a sector that was considered toxic just two years ago, he said “People seem to really believe that a housing recovery is finally happening.”
On Tuesday there was yet another sign of good things to come: Whirlpool (NYSE: WHR) upped its earnings guidance for the year.
Soma Biswas is based in New York and is mergermarket's Private Equity Editor. She can be reached at soma.biswas@mergermarket.com
