Investment fund Advent acquires Düfa for 18 million euros

The end of last week saw investment fund Advent sign an agreement whereby it will acquire 100% in the lacquer and paints maker Düfa Romania in a deal worth 17-18 million euros, sources close to the transaction told Ziarul Financiar. Düfa is one of the top three players on the local market.

The amount paid in the deal represents the base value of the Düfa Romania business related to its production of lacquers and paints, as well as the dividends for the previous financial year. However, Advent will not take over Düfaa??s Class A office building in the French Village in Bucharest or its 90% stake in Global Real Invest, a joint venture established by Düfa and German group Interpares Mobau Interbaustoff to develop a network of construction materials distribution centres.

These will remain with Dufaa??s former owners, while market sources say the sale of the office building is close to completion.

Dufa Romania began in 1997 when German group Meffert AG established a joint venture with a number of Romanian investors to import and supply lacquers and paints to Romania. Meffert AG owns 50% in Dufa Romania, while Marius Ivan, the general manager of Henkel Bautechnik Romania, owns 40% and Liviu Stan, former general manager of Dufa and current general manger of Global Real Invest, holds the remaining 10%. The cumulated investment by the former Dufa Romania owners is worth more than 10 million euros, according to estimates by the same sources. Neither party had provided any comment by the time this story went to press.

The move by Advent comes as something of a surprise on the lacquer and paints market, where several strategic players have recently looked at takeovers of the top three companies (Köber, Policolor Bucharest and Dufa Romania), encouraged by the attractive profit rates and high growth potential of the market.

This potential is based on the fact that Romania is witnessing growing demand for paint products, though average consumption is still among the lowest in Europe at only 2.8 kg per capita – compared with Hungarya??s 9 kg, Czech Republica??s 12 kg, Germanya??s 17 kg and the northern statesa?? more than 20 kg.

Market sources say Advent even looked into buying Policolor before opting to enter talks with Dufa instead.

Talks for the acquisition of Dufa by Advent began at the end of last year. During the negotiations Dufa Romaniaa??s shareholders received assistance from a joint team of lawyers and consultants from the London and Bucharest offices of German consulting company Haarmann Hemmelrath, while Advent was assisted by the local office of British law firm Cameron McKenna.

The lacquer and paints market that Advent will now enter is worth more than 140 million euros a year, according to some estimates made a while ago.

Dufa Romania posted approximately 15 million euros in turnover for last year.

Advent International recently announced a new investment fund for Central and Eastern Europe, which has received 330 million euros from investors.

Thirty percent of the funda??s investments – no more than 99 million euros – have been earmarked for Romanian companies.

The recently launched Advent Central and Eastern Europe III will invest in media, communications, medical services, construction supplies, financial services and retail companies. adrian.mirsanu@zf.ro