Saint-Gobain has big appetite for new acquisitions in Brazil, exec says
04 AUG 2017
Compagnie de Saint-Gobain SA [EPA: SGO], a French producer, processor and distributor of construction and high-performance materials and packaging products, has “big appetite” for new buys in Brazil, said Thierry Fournier, the company’s president for Brazil, Argentina and Chile.
Speaking on the sidelines of the II Forum de Startups held Thursday in Sao Paulo, Fournier said Paris-based Saint-Gobain is in conversations with a few Brazilian targets and could announce a new deal by year-end. The expansion of its product portfolio and bolstering of its footprint in key geographic markets are some of the drivers behind the company’s M&A push, he added.
As a way to illustrate how the company has relied on M&A to boost its product offering, Fournier noted Saint-Gobain’s acquisition in July of Tekbond, a Sao Paulo–based chemical company specialized in manufacturing adhesive products, from New York-based private equity firm Graycliff Partners and private investors Hanie Issa and Eduardo Melo Albuquerque. It was the first time ever the French company purchased a manufacturer of adhesive products, he noted.
In a press release announcing the transaction, Saint-Gobain said the acquisition would enable it to form important synergies with the abrasives, mortar and flat glass business lines on the construction and industrial markets in Brazil.
Four months earlier, in March, Saint-Gobain acquired Rio Grande do Sul-based Tumelero Materiais de Construcao, a building supplies retailer with 29 stores and 2016 sales of EUR 80m, according to Mergermarket data. Sao Paulo-based Pinheiro Neto Advogados served as its legal advisor, as reported.
Saint-Gobain claims to have the largest distribution sales network for home improvement products and services in Brazil with 70 outlets operating under the Telhanorte, Telhanorte Conceito, Pro Telhanorte and Tumelero brands. Other large players within this space include C&C and Construdecor, both based in Sao Paulo; France-based Leroy Merlin and Sodimacfrom Chile, according to local media outlets.
Startup interest
In parallel to its acquisition plans, Saint-Gobain is also in advanced talks to invest in an undisclosed Sao Paulo-based startup specialized in offering digital communication services, Fournier said. The French company, he added, expects to close a deal “within weeks.” The transaction would help it strengthen its business-to-consumer-to-business (B2C2B) marketing strategy, the executive said.
It would be the first time Saint-Gobain’s Brazilian subsidiary invests in a startup, the CEO said, adding that the French company has been very engaged in the local startup ecosystem. Since August it has been a partner of Cubo, a Sao Paulo-based co-working facility for startups, co-founded by local bank Itau Unibanco [BVMF: ITUB4] and VC firm Redpoint e.Ventures, Fournier pointed out.
It also holds relationships with a few local incubators and is member of the Brazilian Startup Association (ABStartups), he added.
Saint-Gobain booked sales of EUR 39bn and EBITDA of EUR 3.9bn in 2016, according to financial fillings.
Speaking on the sidelines of the II Forum de Startups held Thursday in Sao Paulo, Fournier said Paris-based Saint-Gobain is in conversations with a few Brazilian targets and could announce a new deal by year-end. The expansion of its product portfolio and bolstering of its footprint in key geographic markets are some of the drivers behind the company’s M&A push, he added.
As a way to illustrate how the company has relied on M&A to boost its product offering, Fournier noted Saint-Gobain’s acquisition in July of Tekbond, a Sao Paulo–based chemical company specialized in manufacturing adhesive products, from New York-based private equity firm Graycliff Partners and private investors Hanie Issa and Eduardo Melo Albuquerque. It was the first time ever the French company purchased a manufacturer of adhesive products, he noted.
In a press release announcing the transaction, Saint-Gobain said the acquisition would enable it to form important synergies with the abrasives, mortar and flat glass business lines on the construction and industrial markets in Brazil.
Four months earlier, in March, Saint-Gobain acquired Rio Grande do Sul-based Tumelero Materiais de Construcao, a building supplies retailer with 29 stores and 2016 sales of EUR 80m, according to Mergermarket data. Sao Paulo-based Pinheiro Neto Advogados served as its legal advisor, as reported.
Saint-Gobain claims to have the largest distribution sales network for home improvement products and services in Brazil with 70 outlets operating under the Telhanorte, Telhanorte Conceito, Pro Telhanorte and Tumelero brands. Other large players within this space include C&C and Construdecor, both based in Sao Paulo; France-based Leroy Merlin and Sodimacfrom Chile, according to local media outlets.
Startup interest
In parallel to its acquisition plans, Saint-Gobain is also in advanced talks to invest in an undisclosed Sao Paulo-based startup specialized in offering digital communication services, Fournier said. The French company, he added, expects to close a deal “within weeks.” The transaction would help it strengthen its business-to-consumer-to-business (B2C2B) marketing strategy, the executive said.
It would be the first time Saint-Gobain’s Brazilian subsidiary invests in a startup, the CEO said, adding that the French company has been very engaged in the local startup ecosystem. Since August it has been a partner of Cubo, a Sao Paulo-based co-working facility for startups, co-founded by local bank Itau Unibanco [BVMF: ITUB4] and VC firm Redpoint e.Ventures, Fournier pointed out.
It also holds relationships with a few local incubators and is member of the Brazilian Startup Association (ABStartups), he added.
Saint-Gobain booked sales of EUR 39bn and EBITDA of EUR 3.9bn in 2016, according to financial fillings.