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Advent International Acquires Leading Romanian Paints Business

Published on 2005-08-03. Author : SpecialChem

Advent International has acquired Dufa, Romania's largest decorative paints producer, from existing Romanian and German shareholders in a €15 million equity transaction. The deal includes the acquisition of all intellectual property rights and product brands.

Since its inception in 1993, Dufa has focused on the building paints market, importing decorative products from Meffert, Germany, and then moving on to local manufacturing. Its products are well known for their quality and performance throughout Romania, where its brands, including Superweiss and Danke have strong recognition. Local production of water-based paints commenced in 1998 and was quickly followed by enamels, wood lacquers and plasters. Dufa's 20+% market share is based on good retail distribution and a comprehensive product range for the trade market.

Continuing to focus on product development and addressing the needs and requirements of customers, Dufa has recently established a specialised team of sales consultants, who will work exclusively with B2B clients, and is implementing a development plan for its sales team to improve service to the large local and international retail chains specialising in materials for house construction and decoration.

The market for decorative paints is underdeveloped in Romania. Usage per capita is well below the European average, which exceeds 10 litres per person each year. Rapid growth is anticipated over the next few years, driven by large infrastructure projects, GDP growth and increasing access to mortgage and consumer finance. Dufa intends to drive such expansion by investing in new technologies (including advanced colour systems), strengthening its distribution network and launching new products for all market segments.

"Construction materials are one of the Advent International's main sectors", says Advent International Director, Chris Mruck. "Dufa will be able to deploy knowledge derived through the industry expertise and contacts in our other investments, including Bolix, the Polish insulation materials business owned by Advent, and Materis and Loxam, two of Advent's French investments in the construction field."

Dufa is led by a strong and dynamic management team, headed by Bruno Negoita, as CEO. Commenting on the investment, Emma Popa-Radu who heads Advent's Romanian office and who joins the Dufa Board says: "The quality of the management team, the results achieved over the last few years and the company's dedication to customers' needs are some of the features that have led to us making this acquisition. We look forward to continuing to develop the business further, offering the same high quality and services the market has been accustomed to receiving from Dufa".

Dufa's CEO, Bruno Negoita, says: "I and my colleagues are honoured by the trust the new owners invested in our management team and pleased with their vision for the future. I am glad Advent understood the significant potential of the company and the attractiveness of this market. I am confident that combining our current experience with Advent's international business knowledge, Dufa Romania will establish itself as the most reliable high-quality paint producer on the Romanian market. I also believe that working with Advent's specialists will be a great experience for our employees and business partners and that this cooperation will have an excellent impact on their careers and businesses."

Joining the team as Chairman of the Board is Roger Harrison, former senior executive with ICI in Europe. "The decorative paints market in Romania has recently shown significant developments and good growth is expected in the run-up to European Union entry. Dufa is a quality company, well positioned to deliver outstanding performance."

Advent International has been investing across Central Europe since 1994 and earlier this year raised its third fund of €330 million for the region. The firm's investments in Romania include Brewery Holdings, a regional brewery that Advent, with management, modernised and built into the country's #1 brewery group and which was subsequently acquired by BBAG, MobiFon/Connex,a leading mobile telephony operator, Euromedia, the largest national outdoor advertising group, and Terapia, the second largest local generics manufacturer which Advent took private from the Bucharest Stock Exchange in 2003, the first leveraged public-to-private transaction by a private equity house.

Advent International's advisers on the transaction were Cameron McKenna (legal), Ernst &Young (accounting and tax) and W.S.Atkins (environmental).

About Advent International

Advent International is one of the world's leading private equity firms, with $10 billion in cumulative capital raised and offices in 13 countries across North America, Western and Central Europe, Latin America and Asia Pacific. Since its inception in 1984, Advent has invested in over 500 companies and has helped businesses raise $10 billion through public equity and debt offerings. These include over 130 IPOs on major stock exchanges worldwide.

Source: Advent International


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