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Jacuzzi Brands: cheap, but fair private equity valuation

Posted Feb 7th 2007 3:57PM by Tom Taulli (RSS feed)
Filed under: Deals, Private Equity

Today, Jacuzzi Brands, Inc. (NYSE: JJZ) closed its deal to be bought-out by Apollo Management for roughly $1.25 billion. Yes, by the end of trading, the company will no longer trade on the New York Stock Exchange.

True, the company has a set of strong brands (like Zurn and Sundance Spas). Yet, the housing slump has taken its toll. What's more, the volatility in commodity prices has not helped.

As a private company, Jacuzzi will be able to make some changes, such as reducing overhead and even outsourcing manufacturing.

The company has been trying to sell itself since late 2004. But, there was not much interest -- all in all, Apollo's valuation of 9.6X EBITDA does seem fair.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.