Whirlpool Corporation today announced that it has entered into a definitive agreement with Emerson Electric Co. to acquire InSinkErator, the world’s largest manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, in an all-cash transaction for $3.0 billion.
“We are excited for the unique opportunity to add InSinkErator to our portfolio of leading brands. The acquisition is a clear accelerator of our ongoing portfolio transformation and aligned with our stated goals of investing in high-growth and high-margin businesses and Win Americas,” said Marc Bitzer, Chairman and CEO of Whirlpool Corporation. “InSinkErator is not only an iconic brand with a reputation for the highest quality and performance, but also a business that is purpose-driven and shares our vision of improving life at home. We look forward to capitalizing on the significant growth opportunities we see for this business.”
Established in 1938, InSinkErator is the leader in the food waste disposal industry with a greater than 70% share and the industry’s most recognized and trusted brand. On a full-year basis, ending September 30, 2022, InSinkErator is expected to generate sales of ~$650 million and EBITDA(1) in excess of $170 million. This represents a transaction value of 14x EBITDA multiple, including future tax benefits and synergies. Following the close of the transaction, InSinkErator is expected to operate as a separate business as part of Whirlpool’s North America Region. InSinkErator will maintain its headquarters in Mount Pleasant, Wisconsin.
The acquisition is expected to be immediately accretive to Whirlpool Corporation’s margins, adding approximately $1.25 EPS accretion in fiscal 2023. Whirlpool Corporation also expects to generate revenue upside by capitalizing on InSinkErator’s leading consumer brand preference, an installed base that is fives times larger than the rest of the industry driving a recurring sales profile, the strong underlying secular tailwinds of the U.S. housing market, and the expansion of the InSinkErator brand into new markets and product offerings.
Whirlpool Corporation plans to initially fund the acquisition through available liquidity, with new debt put in place at a later date. The acquisition, which has been approved by the Board of Directors of both companies, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter of 2022. Whirlpool’s 2022 guidance remains unchanged.
Greenhill & Co. LLC served as financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to Whirlpool Corporation.
A conference call to discuss the announced transaction will be held today at 8:30 am EST, hosted by Whirlpool Corporation Chairman and CEO, Marc Bitzer and CFO, Jim Peters. The conference call will be webcast live on the Company’s website at www.whirlpoolcorp.com and may be accessed by clicking on the “Investors” tab located at the top of the page. To listen to the live webcast, participants should visit the site at least 15 minutes prior to the conference call to download any required streaming media software. Key financial statistics, the transaction presentation, and an archived recording of the conference call will be available on the Company’s website for at least 30 days.
(1) EBITDA is a non-GAAP financial measure. We do not attempt to provide a reconciliation of EBITDA for the InSinkErator business to the equivalent GAAP measure of net earnings for the InSinkErator business as certain elements of the estimated full-year EBITDA measure cannot be precisely calculated without unreasonable effort or expense and the significance of these elements are indeterminable at this time. Forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable effort or expense.