Balta Industries, the Belgian manufacturer of rugs, carpets, wall coverings and laminate flooring, has agreed to sell a majority of its shares to Doughty Hanson, the London-based private equity firm, for €600 million ($728 million).
The transaction, which is the first completed by Doughty Hanson in the Benelux region, sees the private equity firm acquire a 70 percent stake from the Balcaen family. The Balcaens retain a 20 percent interest in the business, while the management team have been given the remaining ten percent. CSFB and the Royal Bank of Scotland have underwritten a debt facility for the deal.
The deal does not include IVC, a vinyl business unit that will continue as a separate business outside of the Balta Group.
“Balta is a market-leading business with significant competitive advantages and excellent growth potential,” says Yann Duchesne, managing director of Doughty Hanson in Paris. “We look forward to working with Balta’s management team to develop the business further in the same no-nonsense spirit it has been developed to date.” Filip Balcaen, Balta chairman, said the firm would “play a leading role in the upcoming consolidation process in the carpet manufacturing industry.”
Doughty Hanson will have five representatives on the Balta board, while the management team will have two, with the final one held by Filip Balcaen. Balcaen will advise the management team, which is headed by chief executive Herman Paridaens and chief financial officer Didier Ysenbaert.
Balta was founded in 1964 and has seen its turnover triple since 1990, when Filip Balcaen took over the running of the business from his father. Excluding IVC, Balta’s turnover exceeded €460 million in 2003. Balta employs over 3,500 people, of which 3,200 are based in Belgium. The firm’s rugs are sold in Germany, the UK, France, Eastern Europe and the Far East, while the majority of carpet sales are in the UK, France and Germany.
Doughty Hanson launched its Paris office under Duchesne in January 2003 and the team completed its first deal when acquiring French industrial battery maker Saft from Alcatel for €390 million in October last year.