Xella acquires URSA for an undisclosed fee

Akij Group

A leading European building materials provider, Xella International GmbH has announced the acquisition of URSA from its shareholders, including funds managed by KKR as majority owners. Financial terms of the transaction were not disclosed.

Headquartered in Madrid and with turnover of around EUR450m, URSA is one of the major insulation providers in Europe, focused on mineral wool and extruded polystyrene (XPS) as solutions for insulating residential and non-residential buildings, both new and those being renovated.

The Xella Group develops, manufactures and markets building materials, dry lining panels and lime and limestone products. URSA will complement Xella’s portfolio as a separate business unit.

KKR Credit has been a major shareholder in URSA since 2015 and has supported the business in driving sustainable growth in the face of challenging market conditions. Following a sharp decline in the Russian market, KKR strengthened URSA’s management team and reorganised and streamlined operations. This allowed the business to pursue growth initiatives, including capacity extensions in various manufacturing sites, and thanks to the operational improvements, significantly increased profitability.

Mark Brown, Co-Head of Special Situations in Europe at KKR Credit, said: “The combination of KKR’s long-term capital and an outstanding management team was instrumental in URSA’s strong performance over the past years. We would like to thank all of URSA’s employees for their tremendous work in delivering this excellent result, and wish them well as part of the Xella Group.”

Alejo Vidal-Quadras, Head of Madrid office at KKR, said: “This transaction continues KKR’s strong track record of supporting leading Spanish businesses to develop and grow their operations, even in challenging market conditions. We are convinced that the business will continue to flourish and grow as a key part of Xella’s broader portfolio.”

Pepyn Dinandt, CEO of URSA, said: “KKR’s financial support and operational expertise has proven invaluable in the face of challenging market conditions over the last years. We have built a stronger, more stable business that, together with Xella, is perfectly positioned for continued profitable growth.”

The transaction is expected to close by the end of 2017. The investment in URSA comes from funds managed or advised by KKR Credit.

KKR Credit was advised by Lazard & Co., Limited on the transaction.