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Advent International completes buyout of Ceramica

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13 December 2007, Bucharest - Advent International, a leading global buyout firm, has completed the acquisition of a 70% stake in Bucharest-listed Ceramica Iasi, one of Romania’s leading ceramic bricks and clay roof tiles producers. Including new investment, the transaction total was €35 million.

Founded in 1967 and located in eastern Romania, Ceramica has a long tradition of providing high quality products.  It currently produces some 450 tons of bricks and 50 tons of roof tiles per day, but capacity is being extended with new production lines. The company is profitable and cash flow generative on expected sales of €15 million in 2007.

The acquisition of Ceramica reflects one of Advent’s key buyout strategies: to invest in companies in high-growth sectors. The construction industry in Romania has been expanding rapidly, with growth expected to continue for the foreseeable future. Ceramica is well-positioned to increase its local market share and to export to neighbouring countries.

As part of this acquisition, Advent International has brought in a high-calibre management team consisting of: CEO, Iulian Mangalagiu, previously with Henkel and Rigips; COO, Corneliu Fecioru, formerly with Lafarge; CFO, Radu Ignatescu, previously with OMV Petrom and Villeroy & Boch; and Sales Director, Adrian Minzat, previously with Rigips.  Joining the team at Board level are Bruno Negoita as Chairman and the construction materials expert Dr Gunter Eberz, who will help Ceramica make the transition from a production-oriented company to a modern, market-focused business.

Ceramica’s ambition is to strengthen its leadership position among the top players in the construction materials market by implementing best practices, launching new products, diversifying the services offered to its customers and continuing to invest in modern production capacity.

Commenting on the acquisition, Emma Popa-Radu, Director of Advent’s Bucharest office, says: “In many ways Ceramica resembles investments we have made and successfully exited in Romania, including Romanian Breweries.  The sector is high growth but under-developed, the company has good products and people, but has not yet adopted modern market practices and systems.  We are confident that, together with the new management team, we can expand the production capacity and range, introduce efficient sales and logistics systems, and build exports to make Ceramica a regional market leader.”

Sebastian Tcaciuc, Senior Associate of Advent, added: “Having identified Ceramica a year ago as a company with a strong position in its target market, considerable growth potential, good brand name and profitable operations, this acquisition has provided us with a solid expansion platform.”

Advent International has substantial experience in the construction materials sector across Europe, with investments including Materis in France, Bolix in Poland, Dufa Deutek in Romania and KAI Group in Bulgaria.

The Advent team on this transaction was Emma Popa-Radu and Sebastian Tcaciuc.  Advent’s advisers were: Cameron McKenna (legal), Ernst&Young (accounting), Marsh (insurance), WS Atkins (environmental) and Raiffeisen Capital & Investment (securities broker).

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