Tigre, known for its pipes and fittings, has bought control of Rio de Janeiro-based Fabrimar, the country’s third largest sanitary metal manufacturer, thus entering a market dominated by Duratex brand Deca.
The value of the transaction, which is subject to approval by CADE (Administrative Council for Economic Defense), has not been disclosed. Tigre’s revenue is BRL 3.4 billion/year, while revenues for Fabrimar stand at BRL 150 million.
The agreement involved a delicate governance design, providing for both Fabrimar’s capitalization and the Martins family’s permanence in daily operations. Tigre CEO Otto von Sothen said in a statement that the deal “creates a broader vision of the future in the civil construction market for Tigre.”
The Martins family, Fabrimar’s founder and hitherto controller, has been involved in much of the Brazilian industrialization process, with investments such as White Martins and the textile factory Nova America. The family had received and refused purchase offers for years. Knots were only unraveled once Tigre’s board of directors Chair Felipe Hansen reached out to the Martins brothers, Douglas and David. The entrepreneur families’ histories and Tigre’s strategic vision broke resistances down, said a source close to the Martins for years.
Founded in 1962, Fabrimar is the brainchild of patriarch Fausto Martins, an MIT engineer who used to calculate water flow in Lotus 1-2-3 worksheets and tested his irrigation products on the farms owned by Olacyr de Moares at a time when computers were still rare.
The transaction, which is expected to generate operational and commercial synergies, comes at a time when Fabrimar has concluded a professionalization and turnaround process that increased efficiency plus reduced the company’s banking debt and extended its maturity.
The family first assembled a board of directors, recruiting market professionals. This process was led by former Infoglobo CEO Paulo Novis, who initially joined the board and later advised on the creation of the company’s Family Council.
A year ago, at Novis’ suggestion, the Martins family hired Alexander Corporate Finance, a strategy consultancy firm specializing in companies at moments of transition, founded by former Bank of America banker and former Globopar CFO Stefan Alexander.
Alexander diagnosed Fabrimar’s financial and operating activities and recommended changes. To coordinate this process, the Martins hired André Balbi’s Phares Free Translation
Consultancy. Balbi, who is the former CEO for both Rexam, in the Americas, and Forjas Taurus, put together a team of experts.
Flavio Sinischalchi, from management consulting firm Comatrix, was placed in charge of the company’s daily activities; procurement and costs were under Procurement Garage, owned by former InBev Chief Procurement Officer, Paulo Esteves; while veteran Carlos Braghin’s CBC Business Solutions redesigned the engineering processes.