Target Information

Three Belgian distributors and manufacturers of cleaning products and supplies have merged to form a new entity known as Salubris, which immediately becomes the third-largest player in the Belgian market. This merger includes the companies Essef, Salubris, and Igepa Cleaning, with the initiative led by Laurent Sintobin of Essef. Following the acquisition of Salubris by Essef in October 2022, an agreement has now been reached to incorporate Igepa Cleaning, which will hold a minority stake in the newly formed group. Salubris will primarily focus on large corporate clients, supplying major cleaning companies, healthcare institutions, industrial enterprises, schools, and government entities.

Industry Overview in Belgium

The B2B cleaning market in Belgium has a prominent leader in BOMA. With the merger of Essef, Salubris, and Igepa Cleaning, a significant competitor is emerging in the market, marking the entrance of a third major player. Industry leaders are optimistic about this consolidation, anticipating an increase in market dynamics that will push innovation and competitive pricing. The cleaning sector is vital, especially for businesses requiring stringent hygiene standards, such as healthcare facilities and industrial settings.

This market is characterized by stability and steady demand, reinforcing the importance of maintenance and hygiene, especially amid increasing health awareness. Moreover, the trends toward sustainability and eco-friendliness are reshaping customer preferences, compelling companies to diversify their product offerings. Salubris aims to address these trends by not only integrating major brands but also focusing on their proprietary products under the KOALA label.

This evolving market landscape calls for innovation to meet the changing demands of clients. The consolidation of resources among the three companies will enhance operational efficiencies, allowing for a broader product range and greater market share. The ambition of Salubris’ new management team includes not just organic growth but also strategic acquisitions to bolster their competitive edge.

Rationale Behind the Deal

The merger aims to create a robust entity with a fortified market presence, enabling the new group to leverage combined resources and networks. By integrating the strengths of each partner, Salubris is positioned to diversify its current product offerings and innovate its private label products to cater to shifting market demands. This strategic move is also expected to enhance its competitive positioning against market leaders like BOMA.

The anticipated capital increase, facilitated by the investment firm Vectis, will provide necessary funding for product diversification and expansion efforts, ensuring the viability and success of the new group in the long run.

Investor Information

Vectis Private Equity, which manages EUR 125 million, is an independent private equity fund dedicated to investing in ambitious Belgian small and mid-sized enterprises (SMEs). With nearly 20 years of experience, the team at Vectis is well-versed in the challenges faced by businesses like Salubris, guiding them toward strategic growth. Vectis has invested in over 30 Belgian companies and executed numerous add-on acquisitions, establishing itself as a key player in the Belgian private equity landscape.

The firm's expertise in supporting and scaling SMEs aligns with Salubris's objective of solidifying its market presence and expanding its product range, thus making this partnership a mutually beneficial collaboration.

View of Dealert

This merger represents a strategic move within the Belgian cleaning products industry. The formation of Salubris, by combining Essef, Salubris, and Igepa Cleaning, opens opportunities for greater market penetration and competitiveness. This consolidation is likely to create a more resilient organization capable of responding effectively to industry challenges and customer needs.

Moreover, the commitment to innovation and diversification of the product line, alongside the backing from Vectis, suggests that Salubris is not only equipped to survive but thrive within the rapidly evolving B2B cleaning market. The integration of local production also strengthens its position by ensuring supply chain stability.

Overall, this deal appears to be a prudent investment with strong prospects for growth and market leadership. The leadership's focus on both organic growth and targeted acquisitions signals a forward-looking approach that could yield substantial returns and solidify Salubris’s footprint in the Belgian cleaning sector.

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