Luxembourg-based pitched roof products manufacturer Braas Monier told SeeNews on Tuesday it has signed an agreement to acquire Romanian concrete tile factory Elpreco for 33 million lei ($8.2 million/ 7.4 million euro).
"The acquired plant has been part of Elpreco," Braas Monier group communications and investor relations director Achim Schreck told SeeNews in an email, complementing the information provided in a press release issued by the company on Monday.
The total investment for the acquisition of the assets includes the purchase price, cost related to the acquisition including its integration, the financing of additional working capital needs and additional capital expenditure. The acquisition will be financed from free cash flow and is expected to close at the beginning of the fourth quarter 2016.
Braas expects to generate from this transaction in 2019 revenues of approximately 22 million lei and an operating EBITDA of approximately 7.5 million lei, leading to a strong cash flow profile.
Braas Monier said its investment was encouraged by the recovering building activity in various parts of Southeastern Europe after several years of constant declines.
"In Romania, Bulgaria and Serbia, which are potential sales areas of the acquired plant, the number of dwellings in 2015 was still almost one quarter below the levels of 2009, but is expected to increase again by up to 20% by 2017. With a home ownership ratio of around 90% in these countries, renovation is expected to follow suit and to show a comparable positive development" CEO Pierre-Marie De Leener said.
The products of the concrete tile plant will be sold under the Getica brand in the future.
Braas Monier Building Group is a manufacturer and supplier of pitched roof products in Europe, parts of Asia and South Africa.
It has operations in 36 countries and 118 production facilities and employed around 7,700 people as of end-June 2016.
Elpreco is the largest manufacturer of precast concrete in the Southern Oltenia region in Romania. At the end of 2007 Irish construction group CRH acquired it for 70 million euro ($78 million), from U.S.-based Broadhurst investment fund.
Elpreco had 410 employees in its two factories in the Southern cities of Craiova and Titu, latest data from posted on the finance ministry's website showed.
In 2015, its net profit surged to 3.02 million lei from 168,849 lei in 2014, while its turnover rose 14.8% to 109 million lei, finance ministry data also showed.
(1 euro = 4.4469 Romanian lei)