The Sendenhorst, Germany-based Veka Group will take over one of its competitors, Gealan Holding GmbH, in a deal that will move all Gealan subsidiaries and activities in Europe to one of the leading extruders of PVC-U profile systems for doors and windows.
Veka will see its staff grow by 1,150 employees and expects its annual turnover to increase from 793 million euros ($1.1 billion) in 2013 to more than 1 billion euros ($1.4 billion) following the acquisition of Gealan from financial investor Halder Beratungsbeteiligung.
The pending takeover still needs approval from authorities. The parties have agreed to keep the terms confidential.
Veka officials say they will bolster their position in Germany, Europe and the world by acquiring an established, well-known competitor that recently adopted a differentiation strategy.
“As an essential partner for European window manufacturers, we have to face the challenges of the market. That's why we are strengthening our own competitive situation and, by combining our extensive expertise in profile technology, we will tap further market potential and opportunities for turnover,” Veka Group CEO Andreas Hartleif said in a statement.
The acquisition also contributes to consolidation of the market place, he added.
Internationally, Veka sells PVC-U structural elements to more than 2,200 specialized companies.
The family-owned business currently employs more than 3,600 people at 25 subsidiaries on three continents around the world. The North American operations are known as Veka Inc. and are based in Fombell, Penn.
Joe Peilert, president and CEO of Veka Inc., sees immediate advantages coming out of the Gealan acquisition.
“It means that we will soon benefit from the rich, comprehensive experience and profound expertise of both companies in the areas of extrusion, profile technology, and market development,” Peilert said in a statement.