The Opportunity
H2 Equity Partners was approached during the summer of 2013 to evaluate an investment opportunity to acquire Eurocell from its Belgian listed parent company. The company had been designated “non-core” by its owner and was its only material UK subsidiary active in the building materials market.
At the time, Eurocell was one of the leading PVCu profile and roofline product manufacturing and distribution businesses in the UK generating sales of ca.£150 million per annum. It’s main manufacturing sites were based in Alfreton (Derbyshire – United Kingdom) and the company had a network of 120 branches throughout the UK. Profitability levels were decent, but the lack of focus from the parent company and the ongoing divestment process meant that management was restricted in its ability to aggressively grow and improve the business.
H2’s Investment and Approach
H2 acquired Eurocell in September 2013 and immediately started to develop an ambitious growth and profit improvement plan in conjunction with management. Eight key strategic initiatives were identified with the aim to double EBITDA over the next few years. Each strategic initiative was led by a Eurocell manager and a H2 team member. The quality improvement teams and renewed management focus resulted in a quick implementation of the plans; and virtually all strategic initiatives delivered results ahead of the planned timing and EBITDA impact. Within 18 months the business had managed to more than double its EBITDA and significantly grow its sales.
The Outcome
Eurocell PLC is now listed on the Main Market of the London Stock Exchange and has continued to deliver attractive returns for its stock market shareholders. H2 Equity Partners sold its last remaining shareholding in Eurocell in March 2017 and has generated strong returns on its investment while creating a strong, growing, and sustainably profitable business in its segment.
