Having acquired Brikston in July 2014 and since then more than doubling its operating profit, CEECAT Capital is divesting its portfolio company to the Austrian based Leier Group, one of the largest construction materials manufacturers in Central and Eastern Europe.
CEECAT Capital, a leading private equity fund focused on Emerging Europe and Central Asia, acquired an 85% stake in Brikston Construction Solutions SA (Brikston) in July 2014 and has agreed to sell its current 98.3% shareholding to Leier Group of Austria. CEECAT Capital invested in Brikston through its flagship CEECAT Recovery Fund launched in 2011.
Florian Huth, Partner of CEECAT Capital, commented: “This transaction marks an important milestone in the growth of CEECAT Capital’s Emerging Europe business demonstrating our proven ability to execute sound investments, achieve strong valuation growth and realize exits in the Balkan region leaving behind a stronger and healthier business after our investment. We strongly believe that the Leier Group under the leadership of Michael Leier will contribute to the next stage of Brikston in its lifecycle as it continues its success in the Romanian market.”
Established in 1967 as a state-owned entity and privatized in 1994, Brikston is a leading brick producer in Romania. Brikston provides the Romanian construction industry with a wide product portfolio consisting of hollow bricks, full bricks, façade and decorative products in various colors and dimensions. Headquartered in Iasi, Brikston’s turnover exceeded €20 million in 2018, helped by its large and efficient distribution network throughout Romania, as well as by fast-growing exports to Republic of Moldova and Ukraine.
Building on its previous experience in investing in walling products manufacturers (e.g. both bricks and AAC producers), CEECAT Capital has enabled Brikston to go through major changes including but not limited to (i) production changeover from commoditized hollow bricks to higher value-added products, (ii) development of exports to Republic of Moldova and Ukraine, (iii) product line extension through imported façade and design products and (iv) introduction of various efficiency programs. CEECAT Capital’s initiatives have led to continuous improvement in Brikston’s financial and operational results, including its very strong cash flow, with 2018 seeing the best performance since inception of the company. Due the outstanding results during the last four years CEECAT Capital has increased its shareholding in the company as its shares were delisted from Rasdaq, and owns over 98% of the Brikston shares as of today.
With a strong management team leading more than 210 valuable, performance-oriented employees, Brikston has consistently reached record levels of EBITDA and profitability margins, year after year. Through major developments in production lines, marketing and R&D, Brikston is currently producing top quality products, many of which significantly exceed the minimum industry standards. Having surpassed the 90% production capacity utilization level, Brikston manufactures 350,000 cubic meters of bricks per year.
“With the support of CEECAT Capital Brikston has performed very well by expanding the areas to which products were distributed as well as by expanding its product portfolio. We are producing more than 45 items, well above industry norms at the Iasi facility. These excellent results achieved are supported by our constant focus on our partners’ needs and by investments in customer service. Brikston products are available on the shelves of more than 250 distributors throughout Romania, as well as in DIY chains such as Dedeman, Leroy Merlin, BricoDepot, and Hornbach. During the last four years we have increased exports to The Republic of Moldova and Ukraine by more than 50% every single year, thus achieving a key priority of the Company.” – said Iulian Mangalagiu, CEO of Brikston Construction Solutions.
Due to the ownership change and the experience of Leier, Brikston now has the opportunity to continue to perform in a new growth cycle, in which it will benefit from the 50 years of experience of such a large European player. Leier Group, with a turnover exceeding €200 million pa, owns 40 production facilities in 7 Central and Eastern European countries, i.e. Austria, Hungary, Poland, Slovakia, Romania, Croatia and Ukraine.
Leier operates business in the building material market, real estate, construction of machinery and molds, respectively in the field of automobile distribution. It is one of the top producers of building materials in Central and Eastern Europe. Even before 1989 Leier was already an established name in Hungary and Poland, where it sold a wide range of products, which builds up a presence of over 35 years in ex-communist countries.
The Austrian group has a wide range of construction materials products, including concrete wall building materials, concrete roof tiles and pavers, precast for sewage and landscaping as well as a wide range of structural precast for stairs, roofs and walls. The group has wide expertise in the brick market having several production facilities throughout Eastern Europe. Leier is the renowned producer of Durisol, a concrete block that contains wood, a product used for building acoustic barriers for green, sustainable constructions.
“Romania has been on our list for expansion and development for a long time. Based on the proven performance so far, Brikston will allow us to offer our customers in Romania a wider range of products and to maintain the high quality standards that they are used to. We will develop our presence in Romania through continuous investments which will allow us to capture the full development potential of this country,” said Michael Leier – CEO of Leier Group.