Riverside Exits Polish Chimney Maker May 18, 2012
Firm Sells MK Chimney Systems After Successful Hold
The Riverside Company has completed the sale of MK Chimney Systems to French buyer Isotip-Joncoux Group. The sale of the Polish producer of chimney systems, liners and related products generated a gross cash-on-cash return of 2.9x.
Based in Zary, Poland, MK manufactures and distributes a wide variety of branded, high-quality flue gas extraction systems made of refined steel to customers throughout Europe. It is a leading player in Poland and holds an established position in Germany and Scandinavia. The company offers a wide variety of chimney systems, including single wall chimneys, double wall chimneys, condensation systems, chimney cowls and other products.
Riverside invested in MK in 2006, and quickly set about building on the company’s strong foundation. Where MK had previously focused on domestic and Eastern European customers, Riverside helped the firm expand exports to more profitable markets in Western Europe, particularly Germany and Scandinavia. MK’s position in Germany was further strengthened by the acquisition of a German distributor in 2010. Riverside helped MK make great strides in developing a strategic growth plan, facilitating operating efficiencies, introducing new products, and implementing other initiatives. Sales, marketing and information systems were also strengthened and MK launched a web shop during Riverside’s hold period.
In 2007, the radical rise in speculative prices of alloy raw materials led MK to developing innovative new products that were more efficient and less price volatile, and that ultimately helped to create a sustainable competitive advantage for MK. Riverside Operating Partner Fabio Pesiri played an integral role in much of the progress, working closely with MK management to improve performance and develop value-enhancing initiatives.
“MK was a great company for Riverside’s international and growth-oriented approach,” said Principal Tomasz Glowacki, who led the transaction for Riverside, “Not only were we able to work with a strong management team, but we also had a great set of high-quality products upon which to expand the company. We’re proud of the work we did to further develop and build the company over the last six years.”
MK Chimney CEO Piotr Siudak is looking forward to the next chapter in this company’s history.
“Riverside was a great partner in our growth. Within a short period of time, we implemented a new market strategy, completely modified production processes and changed the ERP system, completed an acquisition in Germany and improved the product portfolio. The company is now not only very profitable but diversified in terms of customers, products and suppliers.” said Siudak. “We’re looking forward to continuing to deliver exceptional value and outstanding products.”
Working with Tomasz Glowacki on the transaction for Riverside were Operating Partner Fabio Pesiri, Principal Adam Pietruszkiewicz and Vice President Marcin Goszyk.
CAG advised Riverside on the sale of MK, and CMS Cameron McKenna provided legal counsel to the sellers.
The Riverside Company
The Riverside Company is a global private equity firm focused on acquiring growing businesses valued at up to $200 million (€200 million in Europe). Since its founding in 1988, Riverside has invested in more than 280 transactions. The firm’s international portfolio includes more than 80 companies, and it has $3.2 billion/€2.5 billion in assets under management.