3G Capital Buys Leading Window Coverings Maker Hunter Douglas for $7.1B

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3G Capital Buys Leading Window Coverings Maker Hunter Douglas for $7.1B
Credit: © Reuters.

by Daniel Shvartsman

Investing.com - 3G Capital is acquiring leading windows covering maker Hunter Douglas NV (AS: HUDN ) in a deal announced after yesterday afternoon.

The global investing firm will pay €175/share for Hunter Douglas's shares, buying out minority shareholders as well as the Sonnenberg family, which owned 88% of the company. The Sonnenberg family will maintain a 25% stake in the business as part of the deal.

This concludes a tumultuous if profitable year for Hunter Douglas shareholders. The Sonnenberg family had attempted to buy out minority shareholders at €64/share in a deal announced last December. Due to shareholder appeals about what was perceived as an opportunistic, lowball offer, the family raised the bid to €82 in a tender deal. That tender offer failed as only .18% of shares were tendered, and the Sonnenberg family withdrew the offer.

Meanwhile, Hunter Douglas's business benefited from the hot global housing market, with its first nine months of 2021 producing 23% higher sales compared to 2019, along with an 81% increase in EBITDA and a 106% increase in net income, underlining the opportunistic nature of the original Sonnenberg family offers.

This is 3G Capital's first major announced deal since merging Kraft Foods with Heinz in 2015. The firm, once highly praised for its "zero-based budgeting" philosophy and for partnering with Warren Buffett on several deals (including Kraft Heinz (NASDAQ: KHC )), has seen its reputation take a hit after Kraft Heinz and Anheuser Busch Inbev (BR: ABI ) NV ADR (NYSE: BUD ), another of its companies, struggled with debt, slow growth, and dividend cuts over the past five years. It also came under fire for a failed hostile takeover bid of Unilever in 2017.

The 3G Capital offer is 73% above yesterday's close. The deal is expected to close in Q1 2022. João Castro Neves, a senior partner at 3G, will assume the role of CEO after the merger.

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