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Advent International acquires KAI Group

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14 December 2007, Prague - Advent International, a leading global buyout firm, has agreed the acquisition of a majority stake in KAI Group, Bulgaria’s largest manufacturer of interior and exterior floor, wall and decorative ceramic tiles. The deal gives Advent a 70% stake in the company.

KAI Group, which employs over 1,000 people, currently produces over 14 million square metres of tiles per year at two production facilities and also comprises a transportation business and a clay mining company. The company’s plants, built with the support of Italy’s SACMI IMOLA, meet international standards.

With a significant share of the domestic market, KAI is a well known brand, delivering to its distributors superior service and logistics. Its products, positioned in the mid- and upper mid-market segments, offer high quality at competitive prices.

The management team, led by CEO Spas Shopov, has built the company into Bulgaria’s market leader, on the basis of high standards of service, strong cash flows and efficient logistics. Advent International will help the company strengthen senior management, improve IT systems, develop sales and marketing, enhance its product range and significantly increase capacity.

The company plans to consolidate its local market position, while expanding sales regionally with initial focus on Greece and Romania, where KAI’s products compete well on design and price against more expensive imports.

Advent International is the longest established international private equity firm in Central Europe and has, since 1994, backed 32 companies in seven countries, many of which have been ground breaking investments and exits for the region. These include BTC, the Bulgaria Telecommunications Company, acquired by AIG this year and Terapia, the Romanian generic pharmaceuticals manufacturer acquired by Ranbaxy for $324 million in 2006.

Advent’s Central Europe team has 13 investment professionals in London, Warsaw, Prague (covering Czech, Slovakia and Hungary), Bucharest (covering Romania, Bulgaria and Turkey) and Kiev, and 11 investment professionals in its Turkish investment partner, TurkVen. Advent is already present in the building materials sector in Poland and Romania through its investments in Bolix, an exterior insulation business, and Dufa-Deutek, Romania’s largest decorative paints producer.

Commenting on the acquisition of KAI, Advent Partner Chris Mruck said: “KAI has entrepreneurial management, good design, modern manufacturing and excellent logistics. With price and quality advantage to most other mid-market tile suppliers in the region, it should succeed in consolidating its position in the rapidly-growing Bulgarian market and expanding into neighbouring markets.”

Spas Shopov, Executive Director of KAI, added: “Advent International brings to KAI not just capital, but also substantial international experience of the building materials sector and of creating regional market leaders in Central Europe. This is a good partnership for our company and we are delighted to have Advent on board.”

Ivo Evgeniev, Chairman of KAI commented: “The partnership with Advent, a firm with a deep local knowledge and presence across all of Central Europe, is exactly the platform we need to accelerate our regional expansion. I anticipate KAI growing to a capacity of 30mn square metres within a very short period.”

The Advent team on this transaction were Chris Mruck (Prague); Tamas Nagy (Kiev); Monika Morali-Efinowicz (Warsaw); Teartse Schaper (Amsterdam) and Jakub Chelmicki (Warsaw).


Chris Mruck

Managing Partner, Czech Republic

T: +420 234 749 750
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Monika Morali-Efinowicz

Managing Director, Head of Warsaw, Poland

T: +48 22 627 5141
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