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MOSCOW (MRC) -- Flugger (Rodovre,
Denmark) says it has agreed to buy 70% of Eskaro Group (Gothenburg, Sweden), a
company that makes paint and related products with operations in Ukraine,
Russia, Belarus, Estonia, Latvia, and Finland, said Chemweek.
The
acquisition is awaiting approval by the competition authorities, which is
expected to be granted in early 2021, the company says. Flugger has five
factories across three countries, producing tools, paint, and designer
wallpaper, and it owns 60% of the almost 400 stores in a retail chain in
Scandinavia, Eastern Europe, and China that markets these
products.
Flugger will own 70% of Eskaro, following the completion of the
acquisition and the remaining 30% will be owned by Eskaro’s co-founder Igor
Chumakov, the company says. Chumankov will be in charge of Eskaro’s day-to-day
operation and management, and develop the company’s short- and long-term
business plans in cooperation with Flugger’s management, it says.
"Eskaro
has created a solid platform in Eastern Europe, which we believe has potential
for further profitable growth. The company has grown by 15% annually since 2016,
and we expect to be able to utilize significant synergies between Flugger and
Eskaro over the coming years. With the acquisition of the Polish company Unicell
in November 2019, we significantly strengthened our position in the Polish DIY
market, and now we’re doing the same in large parts of Eastern Europe with the
acquisition of Eskaro, which has a leading position in water-based decorative
paints," says Jimmi Mortensen, CEO of Flugger.
Eskaro employs about 1,100
people and generates annual revenue of approximately 420.0 million Danish krone
(USD67.2 million), Flugger says. Eskaro operates six factories across Ukraine,
Russia, Belarus, Estonia, Latvia, and Finland that produce in total more than 30
million liters/year of paint, varnish, and primer, the company says. Eskaro
expects 2020 EBIT of DKr27 million, an EBIT margin of 6.5%, and EBITDA of DKr40
million with an EBITDA margin of 9.5%.
The acquisition is
also in line with Flugger’s strategy, Going Green, “where we see further growth
potential in Eastern Europe and seek to expand Flugger group’s presence in
Eastern Europe,” Mortensen says. It brings Flugger closer to achieving its
2023-24 financial targets of revenue above DKr2.5 billion and EBIT of more than
8%, he says.
As MRC informed earlier,
Russia's output of chemical products rose in October 2020 by 7.2% year on year.
At the same time, production of basic chemicals grew in the first ten months of
2020 by 6.3% year on year. According to the Federal State Statistics
Service of the Russian Federation, polymers in primary form accounted for the
greatest increase in the January-October output. |
