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· Posted on
February 21, 2024

Whirlpool just added the boujee InSinkErator to its cart because it turns out people love crushing stuff

Whirlpool has acquired the company behind the waste disposal system InSinkErator.

What's the key learning?

  • InSinkErator is the waste disposal system that sits in boujee sinks and crushes every piece of waste in its wake
  • Whirlpool acquired Emerson Electric Co., the company behind InSinkErator, for US$3 billion
  • Valuing a company can take many different forms and each one of these can result in very different valuations

👉Background: Let's look back to the year 1938. It's one year before World War II begins, Italy won the FIFA World Cup and the InSinkErator is born.

👉 What happened: InSinkErator is the waste disposal system that sits in boujee sinks and crushes every piece of waste in its wake.

👉 What else: Now Whirlpool, the whitegoods company, has acquired Emerson Electric Co, the company behind InSinkErator for US$3 billion. Turns out the InSinkErator company generates nearly $600m USD in revenue per annum. Not beehd at all!

What's the key learning?

💡Valuing a company can take many different forms. And each of these forms can result in very different valuations for a company.

💡For an earlier stage company, you might choose to use a multiple of the company’s revenue. But for a later stage company, you might look into the company's price to earnings ratio (P/E ratio) and compare that to similar companies.

💡In this case, Whirlpool used a multiple of InSinkErator’s EBITDA (earnings before interest, depreciation and amortisation). And apparently 18.1 x EBITDA was the magic number for Whirlpool.

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