PE in CEE - Deutek
Country: Romania
Romanian paints and coatings innovator
COUNTRY | Romania | RETURN | 3.9x |
GP | Axxess Capital | GROWTH | +46% sales in premium products |
INVESTMENT | EUR 12.5 million | EMPLOYMENT | 22 new jobs |
SECTOR | Paints and coatings | INVESTMENT TYPE | Buyout |
INVESTMENT | August 2013 | FUND OWNERSHIP | 100% |
EXIT | January 2017 | EXIT ROUTE | Trade sale |
Investment rationale
Axxess foresaw a cyclical upturn in the Romanian paints and coatings industry driven by a housing shortage and growing demand for renovation projects. The competitive landscape was favourable - local players were struggling in the downturn and there were no multinationals. Axxess was convinced that the right executive team could leverage Deutek’s excellent position and strong brand recognition, while at the same addressing its financial and regulatory shortcomings.
Deal history and structure
Deutek was owned by a global PE fund looking to exit. The company was highly indebted after an unsuccesful investment programme, and the bank demanded full repayment. Using its industry experience and armed with a professional plan, Axxess convinced a new bank to refinance Deutek. This enabled it to close the deal, investing EUR 12.0 million of equity and EUR 0.5 million of subordinated debt.
