IK Investment Partners to Acquire SCHOCK

IK Investment Partners (IK) is pleased to announce that the IK VIII Fund has reached an agreement to acquire Granite Holding GmbH (‘SCHOCK’ or ‘the Company’), the world’s leading granite kitchen sink manufacturer, from HQ Equita. Financial terms of the transaction are not disclosed.

As the original inventor of the manufacturing technology commonly used in the production of granite sinks, SCHOCK has gained a reputation for innovation, quality and technological excellence. In fact, more than 60% of all quartz composite sinks manufactured worldwide are based on the production technique developed by SCHOCK. Based on a quartz-acryl composite developed by SCHOCK, the Company’s premium product is three times as hard as natural granite and superior in product performance to sinks made from other materials. The Company`s product line comprises sinks for every kitchen style and personal taste, with more than 200 sink models in as many as 40 different colours.

“We are on an exciting trajectory, building on recent product launches such as the CRISTADUR® EXTREME sink and on the repositioning of the SCHOCK brand. The Company is now well placed for the next phase of its development and IK’s industry expertise, excellent track record and broad network make them the ideal partner to help us achieve our long-term growth ambitions,” said Ralf Boberg, CEO of SCHOCK.

“With over 90 patents and a 21% global market share in granite kitchen sinks, SCHOCK is a high quality business and a true innovation leader within its niche. IK has a strong track record within the sector through investments in Hansa Group, Nobia and TCM Group and we are proud to have the opportunity to support the Company and its talented management team going forward. Together, we believe there are significant opportunities to grow the business both organically and through acquisitions while continuing to put the customers first,” said Detlef Dinsel, Partner at IK and advisor to the IK VIII Fund.

Completion of the transaction is subject to customary legal and regulatory approvals.

The acquisition of SCHOCK marks the IK VIII Fund’s second investment in Germany.

 

Interview with Jörg Preuß, Partner at KPMG AG WPG:

 

Here we speak exclusively to Jörg Preuß about his involvement in project Stone, the sale of Schock – a leading manufacturer of high quality sinks – by HQ Equita to IK Investment Partners and the challenges he faced along the way.

 

Please tell me a little about your work and your involvement in the deal?

I joined KPMG in 2009 with a focus on Strategy and Commercial Due Diligence projects, mostly for Private Equity investors. Over the years, I have been involved in a wide range of different industries, covering vendor as well as buy-side commercial due diligences and performance improvements.

Project Stone was an exciting analysis of the leading player in the granite sink market. Our focus was on the independent analysis of the market environment as well as the customer and competitor landscape. Based on our extensive analyses, we challenged management growth assumptions and validated the Business Plan, including providing an outlook on potential upsides beyond the management plan.

 

Why is this a good deal for all involved?

Schock is a fast-growing company which was supported by HQ Equita on its expansion path. Based on its leading market position, excellent products and favourable market trends, the company has a very positive outlook and the new investor can add its knowledge and financial capabilities to foster Schock’s further growth.

 

What challenges were there? How did you tackle them?

The main challenge was that there was almost no specific market intelligence publicly available, especially for regions such as Asia. Some of the regional markets are at an early stage and are just about to develop. Therefore, we conducted in-depth discussions with market participants to understand and verify, for example, key market developments and trends, including differences in customer preferences and regional competitive landscapes. We also developed a market model to independently forecast market development. This model and our further analyses helped us to challenge the Business Plan by comparing it in detail with market development, specific customer feedback and the competitive intensity by region and product group.

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