Materis

 

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In November 2003 we realised our investment in Materis, the former speciality materials division of Lafarge - the world's leading provider of construction materials.

Acquired in January 2001, Materis (formerly Lafarge Speciality Materials) was a joint venture between a syndicate of three private equity investors, Lafarge and LMS' incumbent management team. The acquisition (enterprise value €890m) was of five of the division's seven businesses: aluminates, mortars, admixtures, refractories and paints - all with leading or leadership positions in their respective markets.

Re-branded Materis, the newly created company employed 4,500 staff operating from 50 production facilities worldwide. Revenue at the time of the acquisition was €1.2bn. Lafarge's decision to remain involved with Materis via a joint venture enabled them to retain an interest in the future upside of a business in which they believed and had invested in heavily, while at the same time realising cash to help fund the acquisition of Blue Circle, the UK's leading cement manufacturer. The primary focus of our strategy was to optimise Materis' operations, implementing supply chain and plant operating efficiencies and improving working capital performance. The company also made several add-on acquisitions in the US and Spain, expanding its construction-related activities.

The strategy was successful. Despite difficult economic conditions affecting many of its global markets, Materis demonstrated the stability and resilience of its business model by delivering not only continued growth but improved profits, raising both the profile of the company and enhancing its value. The acquisition by LBO France will support the continued growth of the business, enabling Materis to leverage its position and capitalise on the on-going consolidation in the chemicals industry. 

 

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