Whirlpool Corp. to acquire InSinkErator for $3 billion
August 10, 2022
Whirlpool Corp. announced that it has entered into a definitive agreement with Emerson Electric Co. to acquire InSinkErator, a manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, in an all-cash transaction for $3 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 Corp. "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 a leader in the food waste disposal industry with a greater than 70% share. On a full-year basis, ending Sept. 30, 2022, InSinkErator is expected to generate sales of $650 million and EBITDA 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 Corp.'s margins, adding approximately $1.25 EPS accretion in fiscal 2023. Whirlpool Corp. 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 Corp. 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.