HSBC Private Equity has today announced that it has led, structured and arranged the institutional buy out of the plumbing division of Caradon plc. Total financing to complete the transaction is £496 million, which was provided through a combination of institutional equity and senior debt mezzanine facilities arranged by J.P. Morgan Securities. J.P. Morgan Capital was a significant minority co-investor in the transaction. Completion of the transaction is subject only to the approval of Caradon's shareholders and to normal regulatory clearances. 

Caradon's plumbing division has leading market positions in its four product areas of showers, bathrooms, boilers and radiators. Its brands include Mira and Rada showers, Twyford and Doulton in Bathrooms, Ideal Boilers and Stelrad Radiators. 

Generating sales of £338m in the year to 31 December 1999 and operating profit before head office costs of £41m on a stand alone basis, the plumbing division employs 3,900 people in 10 manufacturing locations across Europe. 

Phil Goodwin, HSBC Private Equity's head of UK investments, commented: "HSBC Private Equity had been tracking the division for some time and approached Caradon some months before it was put on the market. We are delighted to have been able to acquire a leading player in this consolidating industry. In the face of strong trade competition for the individual parts of the division, we are pleased to have been able to buy it in its entirety."

For HSBC Private Equity, it is another major transaction following the purchase of BBA's automotive friction division in a £487 million (€776m) financing in August. Phil Goodwin added: "Whilst we remain committed to medium sized transactions, the recent BBA Friction Materials deal and now Caradon Plumbing demonstrate that HSBC Private Equity can operate successfully in medium and large sized transactions."