updated 5/19/2005 9:02:55 PM ET 2005-05-20T01:02:55

Appliance maker Maytag Corp. has agreed to be bought by an investment group led by private equity firm Ripplewood Holdings LLC for $1.13 billion cash.

The deal announced Thursday evening values the company — which has struggled against low-cost foreign competitors in recent years — at $14 per share, and includes the assumption of about $975 million in debt. Maytag will no longer be a publicly traded company after the deal closes.

The board of directors of Newton-based Maytag has approved the merger agreement and intends to recommend to Maytag’s shareholders that they adopt the agreement.

The sale is expected to close before year’s end, pending regulatory and shareholder approval.

In addition to New York-based Ripplewood, RHJ International, GS Capital Partners and the J. Rothschild Group of Companies are the other partners involved in the purchase.

“After careful consideration in conjunction with our independent advisers and an independent committee of Maytag’s board consisting of all non-management directors, we have concluded that this transaction is in the best interest of our shareholders,” Maytag board member Lester Crown said in a statement. “This transaction will also provide Maytag with greater flexibility as a private company to accomplish long-term goals set out for the company.”

A statement released by Ripplewood CEO Timothy C. Collins said plans are to “take action to become a global low-cost producer and to accelerate growth by introducing innovative new products, expanding its presence in international markets and pursuing selective acquisitions.”

He said the goal will be to use the strength Maytag’s recognized brand names to build the company into a global leader as the fragmented home and commercial appliances industry consolidates. Maytag produces appliances under the Maytag, Amana, Hoover, Jenn-Air and Magic Chef brand names.

The company announced on April 22 first-quarter profits at half of analysts’ expectations and slashed in half its full-year forecast.

Shares tumbled 27 percent after Maytag reported earnings of $7.7 million, or 10 cents per share. That was well below the estimate of 20 cents per share from analysts polled by Thomson Financial.

Maytag reported earnings of $38.7 million, or 49 cents per share, in the same quarter a year ago.

Maytag CEO Ralph Hake said Ripplewood offers strong financial support for the company and will bring operating expertise in global markets including Asia and Europe.

Industry analyst David MacGregor with Longbow Research predicts it will take the investors at least five years to accomplish their goals.

“This is a very ambitious plan,” he said. “The buyers appear to be trying to use Maytag as a platform upon which to build a global enterprise.”

He said taking the company private may help accomplish that goal.

“The kind of work these guys need to be doing is best done behind closed doors and out of the limelight,” he said.

MacGregor said Maytag has very big challenges before including decisions about whether to keep open some of its unionized factories in the United States.

“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.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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