Italcer acquires Terratinta

With a letter of intent signed on 18 July, the Italcer Group, one of Italy’s leading manufacturers of ceramic floor and wall tiles and bathroom furnishings, has initiated the process of acquiring 100% of the Terratinta Group, a company specialising in high-end furnishing surfaces based in Fiorano Modenese.

Under the terms of the agreement, Terratinta’s CEO and shareholder Luca Migliorini will reinvest part of the proceeds of the sale in Italcer shares, thereby becoming a shareholder alongside the group’s CEO and founder Graziano Verdi.

The transaction is expected to close before the end of the year and will consolidate the Italcer Group’s position as one of the leading players in the Italian and global ceramic industry with projected 2023 sales of close to €400 million.

The Italcer Group is also one of the industry’s fastest-growing players. Its growth achieved by acquisitions – Terratinta will be the eighth completed in six years – has given rise to the luxury Italian ceramic hub that was the goal of the group ever since it was formed in 2017.

Italcer now owns the Italian brands La Fabbrica, AVA, Elios, Rondine, Cedir, Bottega, Fondovalle, My Top, Tonino Lamborghini (licensed for the ceramic sector) and Devon&Devon (bathroom furnishing), plus Spray Dry (spray-dried body) and the Spanish company Equipe Ceramicas, with its four production sites in the Castellón ceramic cluster.

At the end of 2022, the Group had 1,064 employees and produced 20.3 million square metres of ceramic floor and wall tiles and large-format panels in 2022 (including 6 million in Spain), achieving consolidated revenues of €360 million, representing a rise of 36.4% on 2021, and boosting its EBITDA to €85 million.

With the acquisition of Terratinta, Italcer now aims to significantly expand its collections with the addition of four further high-end brands (Terratinta Ceramiche, Ceramica Magica, Sartoria and Micro) that guarantee high levels of sustainability thanks to the prestigious B Corp Certification recently gained by Terratinta.

We spoke to Graziano Verdi about growth goals and the initiatives that the entrepreneur and his team are working on.

Tile International: Over the past 4 years, Italcer has doubled its revenues, partly through acquisitions and partly through organic growth of over 15%, which is well above the growth of the market as a whole. What objective are you pursuing?

G. Verdi: Development by the external route is a good model if it is properly managed – I am thinking, for example, of the importance of working on the integration of skills, specific characteristics and specialisations – and provided they are backed up by targeted technological investments for organic growth. The two routes have always run parallel to each other in our business model, as we had planned ever since forming Italcer. Our results so far are more than satisfactory, and, as this last important operation confirms, we are sticking with this development model, with a view to maintaining the brisk pace of growth that we have achieved in recent years.

Tile International: For some time now, your plans to increase the group’s internationalization have included putting down roots in the United States, with a production facility in Tennessee. Is that still on the agenda?

G. Verdi: The American project was already under examination before we finalised our acquisition of Equipe, which therefore took priority; I can confirm, however, that an investment in the United States is still one of our medium-term goals.

Tile International: Let’s talk about your 2022 results, which reached the target you were aiming for, as well as revealing an increase in profit margins. Which parts of your strategy have worked best?

G. Verdi: There is no single element that stands out from the others in terms of effectiveness. On the one hand, we have a fully functioning team. Beyond that, I would say we have simply reaped the benefits of strategic choices that were made at the right time. I am thinking, for example, of how we dealt with the issue of raw materials from Ukraine, which we had already decided to replace in October 2021. Our partial hedging on gas has also enabled us to carry on operating with more peace of mind. Our business model, based on the specialisation of production facilities, is definitely working too. We have opted to focus on three segments – large-format panels up to 160x320cm, small and extra-small formats, and 2cm thick floor tiles for outdoor applications – with the individual production facilities serving the various Group brands. And in addition to these three types, in fact there is a fourth – the most important one – relating to the innovation of Advance, the name given to our patented antibacterial, antiviral and anti-polluting surfaces.

Tile International: Do you plan to give equal weight to strengthening your four pillars?

G. Verdi: In terms of investment, I would say yes, they will all benefit in roughly equal measure. Large-format panels, made in three thicknesses (6mm, 8.5mm and 12mm), currently account for 10% of our total production, equating to around 2 million square metres, whereas the outdoor segment will have to grow in parallel with the increasing demand we are seeing on the market. As far as very small formats are concerned, in other words the segment covered by Equipe in Spain and our Vetto facility in Italy, we had already stepped up production last year, in response to a big increase in sales, and we intend to keep stepping it up in the years to come.

Read the full interview