Buyout Firms Said to Vie for $4 Billion Philips Appliances Unit

Buyout firms including PAI Partners and China’s CDH Investments are among suitors preparing first-round bids for Royal Philips NV’s home appliance unit, people with knowledge of the matter said.

Apollo Global Management Inc. has also been considering a non-binding offer ahead of this week’s deadline, the people said, asking not to be identified because the information is private. Advent International and CVC Capital Partners have separately been studying the business, the people said.

The unit could be valued at more than 3 billion euros ($3.6 billion) including debt, the people said. Philips shares have risen about 5% in Amsterdam trading this year, giving the company a market value of 40.8 billion euros.

Philips said in January it plans to sell its home appliances unit, which produces everything from coffee makers to air purifiers. The potential disposal forms part of Chief Executive Officer Frans van Houten’s efforts to revamp Philips into a focused manufacturer of health-care equipment.

Appliance maker Electrolux AB and Chinese rivals Joyoung Co. and TCL Technology Group Corp. were also invited to evaluate the business, the people said. Joyoung could bid through Hong Kong-listed unit JS Global Lifestyle Co., which sells Shark vacuums and Ninja blenders, if it decides to proceed, the people said.

No final decisions have been made, and there’s no certainty the potential bidders will submit firm offers, the people said. A spokesperson for Philips said the company has received strong interest from private equity and strategic bidders from in Europe and China, declining to comment on specific suitors. Philips also doesn’t rule out an IPO of the unit, according to the spokesperson.

Representatives for Advent, Apollo, CDH, CVC, Electrolux, JS Global, PAI and TCL declined to comment. A representative for Joyoung didn’t immediately respond to emailed queries.

The Philips CEO said in October the process of separating the business is “on track” and expected to be completed in the third quarter of 2021. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are working on the disposal, Bloomberg News has reported.

©2020 Bloomberg L.P.

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