Benvic PDF

Acquired : June 4, 2014
Acquired From : Solvay
Industry : Industrials
Transaction Type : Proprietary, Corporate Carve-Out
Realized : December 27, 2017
Sold To : Investindustrial
Headquarters : France, Italy & Spain
Investment Strategy : Buyout / Turnaround

Benvic is a leading PVC compounder with three manufacturing plants in Europe (France, Italy & Spain). Benvic develops, produces and markets highly customized, high quality, innovative PVC-based thermoplastic solutions in the form of powders and compounds that are utilized across a wide range of rigid and flexible end-applications including building and construction, automotive, cabling, consumer goods, packaging and fluid transport.

Sourcing

In 2011, OpenGate’s Business Development team began a study of the European PVC industry as it was in a down cycle and presented opportunities for potential divestitures by larger corporations. In early 2012, OpenGate identified Benvic, a non-core division within Solvay, a leading Global chemical company headquartered in Belgium.

Transaction Highlights

Over the course of a two-year period, OpenGate remained engaged with Solvay and the management team at Benvic and ultimately completed the acquisition in 2014 outside of a formal process.

Investment Merits

  • Non-core division of larger corporate parent
  • Leader in European PVC compounds market with established brand recognition
  • Reputation for high quality materials, and a leader in product development
  • Overall industry was in a down-cycle
  • Resilient business model would position the business for greater value as industry conditions improved

CARVE-OUT

  • Set-up a new corporate management team to replace HR, Finance and Legal services provided by the seller
  • Separated IT systems from the seller’s systems
  • Set-up working capital financing lines for financing business activity and future growth

Growth

  • Developed a new dedicated sales network, replacing Solvay sales agents by in-house (Germany) or independent agents (UK, Eastern Europe, North Africa)
  • Restructured low performing Italian subsidiary through costs cutting initiatives combined with a reshuffling of Italian products and customers portfolio to improve both profitability and working capital
  • Activated purchasing synergies with other OpenGate-owned PVC companies to achieve price reduction on major raw materials: PVC resin, titanium dioxide, plasticizers
  • Developed new products: thermal break for aluminums windows producers
  • Increased production through dedicated investments: new IXAN line, new extrusion line, increased storage capability

Exit

After achieving tremendous growth in a three-and-a-half-year period, Benvic was sold to a European investment firm, Investindustrial through a competitive sales process.

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