UK-based consumer giant Unilever [LON: ULVR] has mandated Goldman Sachs for the potential exit of Qinyuan Group Co., the Chinese water purification system provider, said two sources familiar with the situation.

Some private equity firms and family offices have shown preliminary interests in the target, said the two sources, adding that the process is still at an early stage and a formal sale is unlikely to take place shortly. This is because the potential buyers are quite conservative about the valuation and need more time to do thorough due diligence over the industry, according to the first source.

Based in Ningbo, Zhejiang Province, Qinyuan generated EBITDA of around USD 12m-USD 15m last year, valued at no more than USD 300m. Its top-line and bottom-line growth are facing fierce price competition from domestic players, said the first source. The sale is driven by Qinyuan’s weak financials and fierce competition, according to the two sources.

A Bloomberg report this March said Unilever is weighing sale of Qinyuan at around USD 300m.

Unilever owns 67.71% of Qinyuan, according to its 2023 annual report. Unilever said its sales in China grew by low single digit led by volume while the market recovery continued to be uneven and slower than expected, as per the annual report.

Established in 1998, Qinyuan provides water purification equipment for home and commercial use with TRULIVA brand, according to its website.

Chinese water purification product market has seen a decline since 2018, with massive copy-cat products and a weak consumer demand hindered the market growth, according to local media reports.

Major players in this sector include A.O. Smith, Shenzhen-based Angel Group, Qinyuan and COLMO backed by Midea [SHE:000333], as per local media reports.

Unilever and Goldman Sachs declined to comment. Unilever China and Qinyuan did not respond to requests for comment.