Carlyle sells Cupa Group to Brookfield

Unquote sister publication Mergermarket reported in May 2021 that Cupa was set to buy Spanish market peer Pizarras Lomba, with Morgan Stanley hired for a strategic review of Cupa.

The business posted EBITDA of more than EUR 80m at the time, alongside EUR 400m in revenues, versus EBITDA of EUR 40m at the time of Carlyle's original investment, sources told Mergermarket.

Expansion reported on 28 January 2022 that the deal gives Cupa an EV of EUR 900m, equivalent to 10x its EUR 90m EBITDA. The publication had reported in August 2021 that the process was drawing interest from sponsors including KKR, Cinven, Ontario Teachers' Pension Plan and ICG.

Carlyle invested in Cupa in October 2016 in a deal that saw the sponsor acquire a 95% stake in the company at an enterprise value of EUR 170m, according to Unquote Data. The deal was backed by debt from HSBC, Mizuho and Societe Generale, according to Unquote Data.

The GP deployed equity via Carlyle Europe Partners IV, which held a final close in July 2015 on EUR 3.75bn. The vehicle was fully deployed as of June 2019, according to Unquote Data. It deployed equity tickets of EUR 125m-275m, targeting upper-mid-market European companies.

The GP held a final close for the fund's successor vehicle, Carlyle Europe Partners V, in October 2019 on EUR 6.4bn. The GP registered its fifth European technology-focused fund in October 2021, according to Unquote Data.

During the investment period, Cupa made seven acquisitions and expanded its international presence, Carlyle said in a statement. The GP also supported the company with sustainability initiatives, focusing on product innovation and energy efficiency. Cupa became the first carbon-neutral natural slate company in December 2020, according to the same statement.

Canada-headquartered listed asset manager Brookfield makes private equity investments in the business services, industrial and residential sectors, deploying via its listed Brookfield Business Partners vehicle and several private funds. It held a final close for Brookfield Capital Partners V in November 2019 on USD 9bn; the vehicle was 45% deployed as of July 2021, according to Unquote Data. It generally invests USD 200m-600m per deal and has a four-year investment period.

Company
Founded in 1968 and headquartered in Galicia in north-western Spain, Cupa extracts, produces and sells natural slate. It has 22 quarries and exports its slate to around 70 countries, employing 2,200 staff. The group comprises 67 companies, including Burton Roofing in the UK and Cupa Stone, which operates in France and Spain. The company posted revenues of EUR 250m and EBITDA of EUR 40m at the time of its initial acquisition by Carlyle; it now posts revenues of EUR 400m and EBITDA of EUR 90m.

People
Carlyle Group – Alex Wagenberg (managing director, Carlyle Europe Partners).
Cupa Group – Javier Fernández (CEO).

Advisers
Vendor – Morgan Stanley (corporate finance); Linklaters (legal).

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