Quest Holdings receives approval for the acquisition of Benrubi S.A.

Quest Holdings acquisition of Bernubi S.A. gets HCC approval

Summary

Target Advisors: Deloitte (financial), POTAMITIS/VEKRIS (legal)

Acquirer Advisors: Grant Thornton (financial), Lambadarios Law Firm (legal)

Total Consideration: €27.2mil. for 70% of Share Capital, option for the remaining 30% in 2027

On January 8th the Hellenic Competition Committee gave the green light to Quest Holdings for the acquisition of 70% of Benrubi S.A., a home and electrical appliances retail & manufacturing company. The acquisition agreement was signed in early October for a total consideration of €27.2 mil., while the total number may increase to €29.2 mil. as minority shareholders will receive up to €2 mil. contingent on the company's financial performance in 2025. Quest Holdings retains the option to acquire the remaining 30% during 2027.

The Acquisition in Numbers 

(in millions €)	FY23	Multiple
Revenue	25.2	1.1x
EBITDA	5.3	5.2x
Net Income	2.8	9.6x

The consideration paid by Quest is 5.2x the target’s EBITDA, which is generally in line with both the average multiple in the CEE region and but slightly higher than the wholesale trade sector’s average multiple of 4.7x. We believe that this premium over the sector multiple is justified as Benrubi has showcased strong financial growth compared to FY22 and has a leading position in the Greek market. The FY23 revenue increased by 16% compared to FY22 and the EBITDA increased by 89% driven mainly by the strong revenue growth and the decrease in overhead costs. Finally, net income increased by 125% from €1.2 mil. in FY22 to €2.8 mil. in FY23.

The Target

Benrubi S.A is a leading company in the small electrical appliances and household goods sector. It owns the Izzy brand with product lines ranging from toasters to personal care appliances, while it is the exclusive representative of Pyrex in Greece. The company through the Izzy brand has three main product lines: i) Electrical Appliances, ii) Personal Care and iii) Home Appliances while it also services several 5 star hotels. The majority of its FY23 revenue, around 97%, comes from wholesale and the remaining 3% is split between retail and other sales. The company has a balanced Debt to Capital ratio of c.50%, while all of its debt is long-term bank debt. Finally, its interest coverage ratio was 5.3x in FY23 compared to 4.6x in FY22.

Margin Analysis	FY22	FY23
Gross Margin	38.2%	44.0%
EBITDA Margin	12.4%	20.2%
Operating Margin	10.6%	18.7%
Net Margin	5.8%	11.3%

Outlook

Quest Holdings, with the acquisition of Benrubi, added an established local manufacturer with strong financials and a powerful position in the local market, to its portfolio of companies. In our opinion the big bet for Benrubi is retaining its leading position and market share in an uncertain fiscal environment. The significant decrease of the Greek population’s purchasing power will oppose significant challenges to the company. Under the Quest Holdings ownership the company will have the opportunity to grow its product line and expand outward to reduce its dependency and exposure to the Greek market.