Maytag Agrees to Go Private in $1.13B Deal

Perhaps people are starting to recognize that Wall Street’s emphasis only on last quarter earnings is not a good model for manufacturing …

DES MOINES, Iowa (AP) — Maytag Corp. has agreed to be bought by a group of investors that would take the well-known appliance maker private, hoping to fix its myriad woes away from Wall Street’s sharp scrutiny.

The company, based in Newton, produces appliances under the Maytag, Amana, Hoover, Jenn-Air and Magic Chef brand names.

In a statement, Ripplewood founder and CEO Timothy C. Collins said the deal offers the group a “legendary company, with a portfolio of world-class brands and a long history of producing high-quality, innovative products.”

Yet it also gives the consortium a company with significant problems, analysts noted.

In the past year Maytag’s profits have slumped steeply, it cut 1,100 salaried workers, closed a western Illinois refrigerator plant and faces the prospect of shuttering two more of its costliest domestic factories. Earlier this year, Best Buy Stores Inc. dropped Maytag as a major appliance supplier, giving its retail floor space over to brands that have shown more consumer appeal, from rivals such as LG Electronics Inc. and Samsung Electronics Co. of South Korea, Siemens AG and Whirlpool Corp.

Analyst David MacGregor of Cleveland-based Longbow Research said a privatization may help the new owners accomplish their goals of using Maytag as a platform to build a lower-cost global enterprise.

“The kind of work these guys need to be doing is best done behind closed doors and out of the limelight,” he said. “These are the types of challenges that are very difficult to execute when you’re living in a 90-day revolving time frame such as is the case for publicly traded companies which must be accountable to Wall Street.”

He said fixing some of Maytag’s most glaring problems would likely take at least five years.

“You really need to just go away and straighten yourself out and turn yourself around and if they can build a global model, then they can bring this company public again in five years. But it’s a five year job make no mistake about it,” he said.

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