Friday, February 23

Investindustrial probes the sale of Neolith, a benchmark in kitchen countertops for 500 million euros

Investindustrial, the Bonomi family fund, probes the sale of Neolith, manufacturer of sintered stone for kitchen countertops and other rooms in the home. According to what different financial sources have indicated to ‘El Periódico de España’, the venture capital manager is working with a financial advisor to sell its stake in the company, which is valued between 400 and 500 million euros. The process is at a very early stage, but it is expected that other venture capital funds will participate in this competitive auction, as well as specialized companies in the sector that can take advantage of synergies.

Neolith was founded in Almazora (Castellón) more than a decade ago, by the founding family of the well-known Levantina marble company, the brothers José Luis and Jesús Esteve. In that year 2009, these entrepreneurs decided to develop a sintered stone material by mixing elements of natural stone and ceramics, which have become a success both nationally and internationally. Nowadays, has a presence in more than 70 countries of all the world, a turnover of more than 120 million euros and a gross operating profit (ebitda) which is around 40 million.

One of the most interesting aspects of the company is its great international presence, promoted by Investindustrial since 2019

In fact, a large part of its sales come from the international channel and one of its great sources of growth is China, a market for which they created a specific company to market their products there and triple their turnover in the Asian giant by 2025. At the moment, sales in China amount to more than 20 million thanks to its 3,700 small points of sale retailers for kitchens and bathrooms, as well as to large bespoke architectural projects in which its sintered stone is used both indoors and outdoors. In addition, Neolith already has 40 stores in the Asian giant to enhance its brand image and boost its growth in this region.

Important capital gains

This international presence is one of the aspects that most attracts venture capital funds, which are looking for businesses that can be easily exported to other countries in order to obtain higher sales. Another of its growth focuses during this period has been North America. Sensing this opportunity to internationalize the group, Investindustrial became a shareholder in the middle of the year 2019 taking a 75% stake for 250 million of euros. With his departure this year, he would double his investment in just three years. Previously, the shareholding was shared between the founding brothers of the company, who participated through two companies Dimorphanda (José Luis Esteve) and Domus Mármoles (Jesús Esteve).

Investindustrial is one of the funds with the longest track record in the Spanish market, with more than 11,000 million euros raised to invest in Europe. In the country, the bottom of the Bonomi has participated in well-known companies such as Applus, Euskaltel or Goldcar, among other. Currently, its Spanish portfolio is made up of three other companies in addition to Neolith: PortAventura (leisure), Campus Training (education) and Natra (food). The latter is also in the disinvestment phase, for which it has hired the investment bank Citi, in a process valued at 500 million euros, as revealed Expansion. He also landed in this company in 2019, after launching a takeover bid that led to the exclusion of Natra from the stock market. This newspaper contacted Investindustrial, which declined to comment on this information.

The Bonomis are one of the best-known families in the Italian and European financial world, having participated in famous companies such as Aston Martin, Ducati or Banca Popolare di Milano (BPM), among others. For the Spanish market, it has two different strategies depending on the size of the company that interests them: its vehicle endowed with 3,750 million euros for large operations that it raised in 2019 and another endowed with 375 million for medium-sized companies (mid-market, in financial jargon) that he launched in 2018.

Interest in construction materials

With the bursting of the housing bubble a few years ago and the previous financial crisis, many of the companies linked to construction materials lived through one of their most complicated moments, coming to see each other entered the contest of creditors in many cases. However, those that managed to keep up with the economic situation ended up being reinforced and consolidated as the survivors of the crisis, arousing the interest of venture capital funds years later. This was especially relevant in the Spanish ceramics industry, where many investors decided to bet detecting important consolidation opportunities.

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This, for example, resulted in the creation of one of the giants in the sector: Altadia (the former Esmalglass), which ended up in the hands of the US fund Lone Star, which promoted the consolidation of the sector to recently sell the company for almost 2,000 million euros to Carlyle. Italcer, another benchmark in the tile industry, also went up for sale last year for 500 million euros. Currently, this company is owned by Mandarin Capital Partners and Miura Capital Partners, which became a shareholder in 2018 and which they have also promoted through purchases. The most recent, that of Equipe Cerámica, at the beginning of 2021. In the niche of kitchen manufacturers, KKR landed together with Artá ​​Capital (the former venture capital manager of the March family) in the Andalusian company Alvic, reaching disburse 300 million euros by mid-2019.