Germany celebrates another mega-deal

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Hot on the heels of CVC's EUR2.4bn acquisition of a 25% stake in Evonik, PAI partners and Goldman Sachs Capital Partners have hit the headlines with their acquisition of building materials company Xella International GmbH. The EUR2bn price tag makes it the largest majority buyout in Germany since the onset of the credit crisis.

Duisburg-based Xella employs more than 7,600 people, is active in over 30 countries and achieved a turnover of EUR1.3bn in 2007. It is being sold by Haniel Group, which is looking to refocus its portfolio, and was divested in a structured bidding process run and advised by Deutsche Bank, Deloitte and Clifford Chance.

This is PAI's second major investment in Germany's building materials sector: in the first quarter of 2007, PAI partners acquired the roofing business of French Group Lafarge SA for EUR2.4bn (February 2007, page 27), subsequently incorporated as Mounier Group GmbH. Both investments highlight confidence in Central and Eastern European markets, where building materials company Xella predicts especially strong growth.

The CEE region is continuing to undergo modernisation and enjoys previously unheard-of levels of activity in terms of investments and infrastructure programmes.