Warburg Pincus, a private equity firm located in the United States, has agreed to buy a majority position in Watertec India, a manufacturer of home bathroom fittings and accessories. According to various sources familiar with the situation, the proposed acquisition will value the unlisted company at Rs 3,500 crore ($450 million).
Watertec (India) Pvt. Limited was founded in 1997 as a joint venture between Coimbatore-based UMS Group, Malaysia-based Watertec, and Sri Lanka-based South Asian Investments.
Watertec (India) is the market leader in plastic bath fittings and accessories. It sells polymer, chrome-plated, and cheap luxury bathroom fixtures, accessories, and sanitaryware.
Warburg Pincus and domestic private equity firm Kedaara Capital are in separate talks to acquire Watertec India.
Multiples Alternate Asset Management, another private equity firm, was also a bidder for Watertec.
Jaquar, Kohler, Duravit, Hindware, Cera, Roca (Parryware), Toto, Grohe, Johnson, and Delta dominate India's Rs 14,000-crore bathroom fittings and sanitary ware market.
Watertec, a market leader in the polymer-based bath fittings business, has three manufacturing sites in Coimbatore with an annual production capacity of around 24 million bath fittings and 20 million pipes and fittings. It intends to open new manufacturing plants in Gujarat and Odisha, as well as more retail showrooms around the country.
Currently, bath fittings and accessories account for 70% of Watertec's income, with the remaining revenue coming from the pipes and fittings section and sanitaryware.
Watertec has a pan-India distribution network of 15,000 channel partners and dealers, 1,800 suppliers, 36 warehouses and branches, and a global presence in markets such as the UAE, SAARC countries, Egypt, and South Asian markets.
According to sources, Watertec had an EBITDA, or operational profit, of Rs 250 crore ($30 million) on revenue of Rs 1,200 crore last fiscal.