Glen Dimplex, an electrical goods company owned by the Louth-based Naughton family, has made $198 million (€185m) from the sale of its Morphy Richards home appliances brand to a Chinese acquirer.
The completion of the sale to Guangdong Xinbao Electrical Appliance Holdings (Xinbao), which trades under the brand Donlim, comes at a time when the Irish multinational group is upping its expenditure on deal-making in the fast-growing heating and ventilation sector. The Shanghai-listed Chinese company confirmed the closing and details of the deal in a stock exchange announcement this week.
Glen Dimplex has spent more than €120 million on deals in the past six months, group chief executive Fergal Leamy told The Irish Times on Tuesday. This includes money spent on completing the acquisition of Australian heating company Thermofilm; buying remaining shares in Groupe Muller, a French company in which it bought a 70 per cent stake in the last 1990s; as well as two other acquisitions.
“We see ourselves doing a number of other deals in the next 12 months,” he said. “There are clearly huge opportunities in heating and ventilation as the world moves away from fossil fuels to electric heating. Our strategy is to grow very strongly in this area.”
The deal with Guangdong Xinbao Electrical Appliance has seen the Chinese group effectively buy the global brand rights of Morphy Richards, including China, Ireland, the UK, New Zealand and Australia. Morphy Richards is a British brand that was acquired by Glen Dimplex founder and industrialist Martin Naughton in the mid-80s.
The transaction will see Glen Dimplex keep rights to distribute the brand for the Chinese company under licence in Ireland, Australia and New Zealand for at least 10 years.
Morphy Richard’s products, including toasters, kettles and other home appliances, have worldwide retail sales estimated at more than $400 million.
It is estimated that Glen Dimplex’s revenues from the brand were running at about €50 million before the deal was struck last year, equating to less than 3 per cent of group sales of €1.5 billion. Glen Dimplex, an unlimited company, does not publish financial accounts.
Guangdong Xinbao Electrical Appliance was the largest of a number of mainly Asian contract manufacturers of Morphy Richard products for the Irish group.