Go back

The Spanish leader in the manufacturing of bathroom furniture

HIG Capital, an international American private equity fund, invest in Royo Group for executing a international build-up process through acquisitions with the aim of achieving EUR250m of revenue THE VECTOR COMPANY advised HIG Capital in this transaction

General Overview

Royo Group was a family-owned company with more than 45 years of experience in manufacturing bathroom furniture products.

The company had acquired in the past a Polish  Company involved in the manufacturing of bathroom furniture kit products to supply the Central Europe markets. Royo Group made a large investment in this subsidiary to increase the production capacity and to change the lean production system with an outperforming results.

The bathroom furniture sector in Europe was based on small companies without a clear specialist leader and Royo Group wanted to become the leader in this market segment achieving EUR250m of revenue.

Strategic Rationale

Through the investment of the private equity in the capital of the company, Royo Group would be  incorporating the experience of HIG CAPITAL in similar international build-up processes. So the transaction would provide enough economic resources and would a greater probability of success in developing the build-up plan around the bathroom products by integrating different companies that would be acquired in different countries.

Key learnings

Before the transaction, the company had successfully and professionally carried out a generational transition whereby the second generation ran the business and even the Managing Director position was assuming by a professional executive out of the owner family.

A high level of professionalization in the company (team, business process, ERP system, business strategy,….) became the company as a unique platform to lead the development of a larger and more diversified group around the products for the bathroom, giving enough comfort to the investor to address the plan.

Additionally the ability to replicate the successful experience of managing subsidiaries in third countries was an opportunity that the company wanted to take advantage about it by scaling up to other complementary products (a few months later a shower tray company named Fiora was acquired).

Otherwise the alignment between the company and the investor with respect to the strategic opportunity from the very beginning helped both parties to define the shareholders agreement that would ensure the implementation of the plan.