Rheem Manufacturing Company (New York) and Paloma Industries (Nagoya, Japan) have reached a definitive agreement to acquire the Australasian water heater businesses of Southcorp Holdings Limited, effective December 31, 2001. The purchases further solidify Rheem’s position as one of the world’s leading producers of storage water heaters for residential and commercial applications.
The acquisition includes Southcorp’s water heater businesses in its home base of Australia, as well as in New Zealand, plus its solar water heater company, Solahart, also based in Australia. In all, Rheem operates three water heater production facilities in Australia and New Zealand. Finally, the acquisition included Southcorp’s interest in Hotstream, a joint venture in China.
Currently, this group of companies employs about 1,400 people and has annual revenues of about $150 million. Products are produced under the Rheem, Vulcan, Solahart and Hotstream
brand names. The transaction does not include the acquisition of Southcorp’s American Water Heater Company, based in Johnson City, Tennessee.
“Rheem Australia, Rheem New Zealand and Solahart are leaders in their respective markets with strong manufacturing, sales and service organizations,” according to Rheem president and CEO Gary Tapella, “and it is our intention to reinforce existing customer relationships with new products and to further expand Rheem’s presence throughout the region.”
New products will include continuous-flow water heaters from Paloma, as well as deep fryers, which are now used by fast-food restaurants throughout Japan. Rheem presently has an Australian subsidiary, Raypak Australia, which will work closely with the new company there. Raypak produces gas heaters for pools and spas, and boilers for residential and commercial applications. In addition, Rheem will explore opportunities to distribute selected air-conditioning products in the region.
Rheem Australia was established in 1936 as a joint venture between Rheem and BHP, a local steel producer. Rheem, which sold its interest in the company in 1973, “is pleased to have the opportunity to return to this important regional market,” Tapella comments. “The product lines, methods of distribution and customer service remain similar to our North American water heater division.” Rheem’s Water Heater Division is based in Montgomery, Alabama. Raypak is located in Oxnard, California, and the Rheem Air Conditioning Division is located in Fort Smith, Arkansas.
Rheem Manufacturing makes water heaters, pool and spa heaters, boilers, and heating and air-conditioning products in North America. The company is a wholly owned subsidiary of Paloma Industries, a privately held firm and Japan’s largest producer of gas appliances with consolidated revenues of more than $2 billion