In early 2010 ARX was approached by KVK’s CEO and minority shareholder, who had a long-standing personal relationship with ARX. KVK is a leading Czech construction materials business, also generating material sales in Slovakia. KVK’s product portfolio consists primarily of mortars, adhesives, bitumen membranes and polystyrene sheets. KVK also operates two quarries.
KVK’s CEO was looking for a tailored solution for a discrete replacement of the majority passive shareholder who was seeking an exit at retirement age. The interests and vision for driving KVK forward between the CEO and the passive majority shareholder had been increasingly diverging to the point where a new supportive shareholder was needed to allow the company to realize its next round of growth. The CEO firmly believed in a growth strategy for KVK – by using the company as a consolidation platform – and he reinvested his exit proceeds alongside ARX.
In August 2010, ARX partnered with the CEO in a transaction that provided the desired full exit for the retiring majority owner, while introducing ARX as a new supportive majority shareholder with a clearly aligned focus on achieving the medium-term strategic plan for the company. ARX also committed additional follow-on funding for the future expansion, while concurrently securing long-term debt financing for the business.
During the period of the ARX investment, KVK:
- Acquired two add-ons of strategic importance, one of which established KVK as the dominant player in the Czech bitumen sheets segment with over 50% market share,
- Realized synergies from successful add-ons integration,
- Streamlined core activities, product portfolio and production sites,
- Complemented management team with a new CFO and Head of Production,
- Appointed a new CEO (in cooperation with reinvesting owner) with strong operational capabilities.
In late 2017 KVK was sold to a Swiss strategic investor (Sika AG), while generating an attractive investment return for ARX and its partners.