Whirlpool Corp., the new owner of Maytag Corp.’s Jade Products Co. in Brea, could end up selling the luxury appliance maker for $50 million or more, according to analysts.
Maytag paid $20 million for the business seven years ago.
The list of potential bidders is long, according to analysts. Appliance makers in China, South Korea and Europe could be eyeing Jade as a way to buy a U.S. brand, they say.
U.S. makers also are said to be looking at Jade, which employs about 160 people in Brea, making upscale ranges, stoves, refrigerators and other cooking gear for restaurants and homes.
“We are not providing information regarding potential buyers, except to say that we have received strong interest from a number of potential buyers and anticipate completing the transaction by the end of this year,” said Jody Lau, a Whirlpool spokeswoman.
A sale could bring the closure of Jade’s Brea plant, said Lawrence J. Horan, an independent appliance analyst in Pittsburgh.
“It is an awfully small business,” Horan said. “It’s all about economies of scale. The most sensible buyer would integrate Jade’s business into products that it may already have so you can get volumes out of it.”
Whirlpool still could keep Jade, said Alex Cheimets of ApplianceAdvisor.com, a Web site that tracks the appliance industry.
“I wouldn’t be surprised if Whirlpool keeps (Jade) but shuts down Brea and has the product manufactured outside California,” he said.
Maytag explored selling Jade in 2001. The unit’s profitability started falling in early 2004.
The company cited “higher stainless steel prices, increased product development costs and production inefficiencies” for the decline.
By early 2005, Maytag reported an improved outlook but offered no details as the Newton, Iowa-based appliance maker prepared to be bought by Whirlpool. The deal closed in March.
Last month, Whirlpool reaffirmed its intent to sell Maytag’s luxury line.
History, Options, Suitors
Maytag bought what then was Jade Range of Commerce in 1999.
Jade moved from Commerce to Brea in 2003.
That same year, the company came out with a line of appliances for the home.
Whirlpool could keep Jade’s home line and dump the commercial business, one analyst said.
A possible suitor could be Sweden’s Electrolux AB.
Some speculate that Jade could add to Electrolux’s upscale Molteni line of commercial ovens sold to restaurants.
“Electrolux is making the point of bringing in high-end commercial products, including handmade ranges sold to upscale restaurants,” said Tim Somheil, editor of Appliance magazine in Oak Brook, Ill. “Jade has quite a reputation. You go to a trade show and you hear talk about them being in the finest restaurants in New York. I’d think someone would want them.”
Jade, founded in 1968, competes with a big local player, Huntington Beach’s Dynamic Cooking Systems Inc., part of New Zealand’s Fisher & Paykel Appliances Holdings Ltd. Fisher has a marketing deal with Whirlpool.
But Somheil said he doesn’t see Jade fitting in with Fisher & Paykel.
In recent years, Fisher & Paykel has expanded with two plants in the U.S., where it derived more than half of its $636 million in revenue for the 12 months ended March 31. Fisher & Paykel just opened another plant in Clyde, Ohio.
Fisher & Paykel moved its U.S. headquarters to Huntington Beach in March. In late 2004, Fisher & Paykel bought local Dynamic Cooking Systems for $33 million from a private equity group.
Another local Jade rival is BSH Home Appliances Corp., a unit of BSH Bosch und Siemens Hausgerate GMBH, itself a venture of Germany’s Robert Bosch GMBH and Siemens AG.
BSH sells a handful of high-end brands from Huntington Beach.
Franz Bosshart, chief executive of BSH, said through a spokeswoman that his company wasn’t interested in Jade.
Other possible suitors: Dacor Inc. in Diamond Bar and Sub-Zero Freezer Co. in Madison, Wis., which also builds commercial appliances through its Wolf Appliance Co.
A Dacor spokeswoman said company officials declined to comment on interest in Jade “after careful consideration” of a request for an interview.
Sub-Zero spokeswoman Allison Allison said her company had no plans to bid on Jade.
Other possible U.S. makers said to express interest include General Electric Co.’s “monogrammed line” of appliances in its GE Consumer & Industrial unit, and Viking Range Corp., according to analysts.
Buyers also could include China’s Haier Group Ltd., and South Korea’s LG Electronics Inc. and Samsung Electronics Co.
“We never saw this kind of interest in U.S. appliance companies 15 years ago,” Somheil said.
