Ethos Buys a (B) Loo Chip
Influential private equity company Ethos has led a consortium in a buyout of Plumblink SA, a plumbing and sanitaryware company headed by former Rainbow Chickens CEO Yannick Lakhnati. Ethos - through its Ethos Fund V - will hold 50.1% of Plumblink with management and empowerment company Innovative Sanitary Solutions (ISS) holding the balance of the shares.
The value of the deal was not disclosed.
Plumblink operates through 23 stores in seven regions in SA, trading under the Plumblink and Bathrooms By Design brand names. The business is aimed at middle to upper markets - focusing on the retail market, the contracting market and the maintenance market. Partnership Ethos said it had established a partnership with Lakhnati, who had been introduced as Plumblink's new CEO effective April 1 2006. Former CEO Colin Anderson retired at the end of March.
Lakhnati - who more recently served as an executive with Richemont - became a legend in his own lunchtime when he turned around the problematic Rainbow Chickens for Remgro several years ago. How exactly Lakhnati ended up with Plumblink is not clear, but the shift from poultry to luxury goods and now to plumbing/bathroom supplies will make for an interesting CV.
Ethos said Lakhnathi brought proven leadership and strategic management skills to Plumblink to take the company to the next level.
In a press release Lakhnati said: "I am excited to partner Ethos in the acquisition of Plumblink, a market leading business in a growth industry, and look forward to expanding the horizons of the business and the relationship with Ethos."
Strength to strength
Ethos partner Shaun Zagnoev believed Plumblink would go from strength to strength "given the significant planned infrastructure spend by government in coming years and the increased confidence and anticipated growth in the housing and construction industry".
The big question, of course, is whether Ethos would consider taking Plumblink to the JSE in the foreseeable future or look for an exit via corporate action. Similar companies like Dawn and Iliad have enjoyed strong market support as infrastructural and housing development continues apace, and both have been actively involved in acquisitions.