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Flugger to acquire 70% of Sweden-based paints manufacturer

November 27/2020

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 Eskaros co-founder Igor Chumakov, the company says. Chumankov will be in charge of Eskaros day-to-day operation and management, and develop the companys short- and long-term business plans in cooperation with Fluggers 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 were 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 Fluggers strategy, Going Green, where we see further growth potential in Eastern Europe and seek to expand Flugger groups 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.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry.
Category:General News
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