As predicted in TSJ January 2019, significant consolidation is continuing in the global tile sector, as flooring companies continue to add tile manufacturers to their portfolios in an effort to complete with global giants like Mohawk.
The latest big tile brand be snapped up in the global consolidation drive is the Brazilian Cecrisa Group; owner of the Cecrisa and Portinari brands. 100% of the Group has been acquired by Duratex, owner of the Durafloor, Deca, and Ceusa brands.
In a deal announced on 22nd May, Cecrisa - one of the leading Brazilian producers of ceramic tiles - has been purchased for Real 539 million; comprising Real 264 million in cash and possible additional payment of up to Real 275 million, dependent upon certain conditions. The value of the company's net debt was Real 442 million.
This new business will significantly enhance Duratex’s portfolio, and should also lead to operational and administrative synergies worth more than Real 250 million.
"We put all our energy on a daily basis to develop solutions to improve the environments, making the acquisition of Cecrisa strategic not only for the expansion of Duratex's business but also to reinforce our purpose of offering Solutions for Better Living," says Antonio Joaquim de Oliveira, Duratex’s President.
“Cecrisa is a reference for the national industry for offering quality and confidence in its products, as well as being the owner of the Portinari premium brand; one of the best known in the market. This acquisition, in addition to Ceusa's expansion, brings important scale and synergy to our business, making Duratex even more competitive," adds de Oliveira.
With a production capacity of 20 million sq. metres per month, Cecrisa has approximately 1,700 employees and operates three manufacturing plants in Brazil: two in Criciúma in the State of Santa Catarina, and one in Santa Luzia in the State of Minas Gerais General.
In 2018, Cecrisa achieved net revenue of Real 652 million and EBITDA of Real 112 million. Duratex recorded a turnover of Real 3.9 billion in 2017 and has a market value of approximately Real 6.8 billion. Duratex had over 11,000 employees prior to this latest acquisition, with eight industrial units are located in São Paulo and Rio Grande do Sul, Brazil.
Since 2012, Cecrisa and Portinari has belonged to Vinci Partners, who acquired 77% of the Group for Real 250 million almost seven years ago. The other 23% belonged to the Freitas family, successors of Manoel Dilor de Freitas, who founded Cecrisa in 1966.
This new purchase follows Duratex's acquisition, in August 2017, of Urusaanga's Ceusa for Real 280 million. Cecrisa and Portinari thus join a strong group of brands, based in São Paulo, Brazil, with established trading relationships with the USA, Argentina, and Europe.
Duratex, founded in 1951, started by manufacturing wood panelling and wall linings. Also in the Group are Deca, a sanitaryware manufacturer; Hydra, a producer of products for water heaters and valves; Durafloor, which manufactures laminate and LVT floors; and Ceusa, one of Brazil’s leading ceramic tile manufacturers.
"Cecrisa/Portinari is well aligned to our Group’s goal of offering solutions to improve the quality of life, and significantly expands our portfolio," says de Oliveira. "Plus this acquisition means the incorporation of a strong brand, Portinari, that is synonymous with quality and design."
Cecrisa was the first Brazilian tile company to practice sustainability with LEED compliance certification. It has a reputation for developing cutting-edge products based on global trend research and for investing in technology and design.
The origin of the Cecrisa Group dates back to the 40s, when Diomício de Freitas started charcoal extraction in the State of Santa Catarina. The Cecrisa Group, a new business venture for the Freitas family, began its activities in Criciúma, Santa Catarina, in the 60s. The first industrial unit was Cecrisa - Cerâmica Criciúma, founded in June 1966 by Diomício de Freitas' son, Manoel Dilor de Freitas, and the factory produced its first glazed wall tiles in April 1971.
Since then, the company has expanded by purchasing and building new industrial units throughout the country. It was the first ceramic tile company in Brazil to produce decorated wall tiles; the first to use electric kilns; the first to produce single-fired floor tiles; the first ceramic company in Latin America to obtain ISO 9002 certification; the first Brazilian producer of porcelain tiles, and the first to produce 600 by 1,200mm tiles in Brazil.
Today Cecrisa is a leader in the Brazilian market, producing floor tiles, wall tiles, special pieces, and porcelain tiles. Its products are exported to more than 50 countries, under the Cecrisa and Portinari brands. The company's total production reached a high point of 33.2 million sq. metres in 2002.
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