Target Information

Profinpar, a Belgian entrepreneurial fund, has invested in Unica, a Brussels-based small to medium-sized enterprise (SME) that designs, manufactures, and markets industrial washing machines. Operating in 50 countries, Unica generates 95% of its annual revenue of approximately €5 million from international sales. Its key markets include France, Saudi Arabia, and the United Kingdom, with 70% of sales being absorbed by EU countries, while also exploring opportunities in Mexico and Japan.

Previously a family-owned business, Unica was led by Xavier Degrave, the founder's son, who has now sold the majority stake to Profinpar but will retain a minority share and support the new management for one year. Thomas Walgraffe, one of the partners at Profinpar, acknowledges the significant work Degrave has done in developing the machines and indicates that now is the right time to accelerate the company's growth by building on its solid foundation.

Industry Overview in Belgium

The industrial machinery sector in Belgium is robust, characterized by innovation and a steady demand for efficient solutions across various industries. The country serves as a central hub for manufacturing, benefiting from a skilled labor force and a strategic location in Europe, facilitating trade and exports.

Belgium's industrial landscape is diverse, encompassing companies producing everything from food processing equipment to high-tech machinery. The focus on sustainability and advanced technologies has led to significant developments in production processes and supply chain management, positioning Belgian manufacturers favorably in the global market.

Recent trends in the sector include a push towards automation and digitalization, with more companies investing in Industry 4.0 solutions. This shift is improving productivity and competitiveness, allowing Belgian firms to maintain a strong foothold in the face of international competition.

Despite challenges posed by global market fluctuations and trade tensions, the future outlook for the machinery manufacturing industry in Belgium remains positive, especially for niche players like Unica, that can leverage their unique offerings to meet specialized customer needs around the world.

Rationale Behind the Deal

The investment by Profinpar in Unica aligns with the fund's strategy to support niche companies with growth potential. With Unica's innovative products and established international presence, there is significant opportunity for expansion, particularly in enhancing product marketing and distribution practices.

The new management under CEO Grégoire de Donnéa aims to modernize the company's offerings while maintaining its original culture. Plans to integrate advanced connectivity features into the machines and improve marketing strategies highlight a commitment to innovation that could drive future growth.

Investor Information

Profinpar is a venture capital fund composed of 45 investors who are also entrepreneurs. The fund specializes in investing between €2 million and €6 million per participation in SMEs located in Belgium, Luxembourg, or France, focusing on niche markets and sectors undergoing consolidation. Since its inception in its current form in 2017, Profinpar has made five investments, with Unica being its first entry into the mechanical manufacturing sector.

By appointing Philippe Gillain, a former CEO of Euro-Diesel, to Unica's board, Profinpar aims to leverage his industry experience to support the company's growth objectives. This hands-on approach reflects Profinpar's commitment to adding entrepreneurial value to its portfolio companies.

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From an investment standpoint, Profinpar's acquisition of Unica appears to be a sound strategic move. The company stands out in a niche marketplace, and its existing international business offers a solid platform for growth. By investing in modernizing the product range and enhancing marketing efforts, Profinpar is setting the stage for significant expansion.

Furthermore, the leadership transition to Grégoire de Donnéa opens up fresh perspectives for innovation and operational efficiency. His background in consumer goods and experience with professional equipment aligns well with Unica’s objectives, suggesting that his leadership may bring about meaningful enhancements.

While there are inherent risks in scaling production and entering new markets, the strategic use of funding from Profinpar and the retention of Xavier Degrave as a transition guide should mitigate potential challenges. Clear growth objectives, including plans to double production capacity, are ambitious yet achievable given the support structures being put in place.

In conclusion, Profinpar's investment in Unica has the potential to yield significant returns, benefiting from both its niche market expertise and the longstanding commitment to innovation and quality associated with Unica's brand.

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