In the News – Mohawk’s Marazzi Tile Unit Grows Inorganically, Buys Emilgroup
Back in September 2016, we anticipated here at Seeking Alpha that Mohawk Industries’ (NYSE:MHK) Marazzi Italian tile unit was “ready to close on a key acquisition, that would be on top of two large production increases made/announced in its Fiorano and Sassuolo production plans”.
The closing of the acquisition was finally announced on January 20th (link, in Italian, as are most of the following ones), pending a green light from anti-trust authorities that we believe will only be a formality.
Rumors estimate the acquisition cost for Mohawk in the €150 million ($160 million) range, and indicate that three companies will be excluded from the deal: Emilgroup’s JV in India, which is still in a start-up phase, Caolino Panciera, a mining company supplying raw materials to the ceramic industry with revenues estimated in the €30 million ($32 million) range, and Zeus, a Ukraine-based production plant with an estimated output of 2 million square meters (21.5 million square feet) in 2014.
We estimate that these three companies represent about €45-50 million in revenues ($48-53 million), and that the brands acquired by Marazzi will add about €140/150 million ($150/160 million) in yearly revenues. Marazzi will add four brands to its offering, specialized in the higher-end market: Emil Ceramica, Provenza, Viva and Ergon, each of them with its own identity.
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