Kalekim Expands Its Targets at Home and Abroad

Kalekim, a Turkey-based building chemicals company, is going public through a consortium led by Ak Yatırım. Kalekim, which began operations 48 years ago within Kale Grubu producing ceramic adhesives and grouts, ranks among the sector's important global players with its broad product range. Following approval by the Capital Markets Board, demand collection for Kalekim's public offering will take place on 6-7 May. The offering will apply equal distribution method for individual investors. Haluk Alperat, CFO of Kale Holding, stated: "As part of the public offering, we plan to offer Kalekim's shares worth a total of TRY 34.5 million nominal value, equivalent to 30 percent of the company, to the public, together with secondary sales. We aim to use 60-70 percent of the proceeds for new company acquisitions or new factory investments that will contribute to Kalekim's growth domestically, and 30-40 percent for growth internationally." Timur Karaoğlu, General Manager of Kalekim, noted that Kalekim continues to grow nationally and internationally, stating: "Despite the challenging pandemic period, in 2020 we increased our sales revenue by 37.9 percent to TRY 526 million. We are now opening up the value we have created through our 9 factories domestically and internationally, our strong infrastructure and 48 years of accumulated expertise to our investors." Mert Erdoğmuş, General Manager of Ak Yatırım, said: "Despite recent foreign outflows from BIST indices, following strong gains in 2020, the first quarter of 2021 tested new highs. The driving force here is the number of domestic investors exceeding 2.5 million. The reason we highlight Kalekim, which is 'the market leader in ceramic applications in Turkey's building chemicals sector', as one of the most noteworthy public offerings for investors in 2021 is that it is an industry-leading company with a solid capital and financial structure. Bringing Kalekim to Borsa İstanbul is important for our country." Kalekim, a subsidiary of Kale Grubu and the leading brand of the building chemicals sector, has reached the final stage for its public offering. With the Capital Markets Board's approval of the public offering application, demand collection for Kalekim will take place on 6-7 May at a price of TRY 13.75-14.75 per share.   Founded in 1973 by Dr. İbrahim Bodur, founder of Kale Grubu companies which have made very important contributions to Turkey's development, Kalekim began its activities with the production of ceramic adhesives and grouts and today continues its operations in the building chemicals sector with a broad product range.   Kalekim, a global brand in its sector, aims to take another important step on the path to sustainable growth by strengthening its position with new partners it will add through the public offering. Within the public offering program, Haluk Alperat, CFO of Kale Holding, Timur Karaoğlu, General Manager of Kalekim, and Mert Erdoğmuş, General Manager of Ak Yatırım, provided explanations about the current stage through an online press conference they organized.  

"Kalekim is a value not only in Turkey but on a global scale"

Haluk Alperat, CFO of Kale Holding, emphasizing that Kalekim has become a very important value internationally as well as in Turkey through the successful products and services it has produced since its establishment, spoke as follows regarding the public offering process: "Following Capital Markets Board approval as part of the public offering, we plan to increase Kalekim's existing paid-in capital of TRY 100 million by TRY 15 million to TRY 115 million. Besides the TRY 15 million portion on which capital increase is made, we will open to the public a total of TRY 30 million, equivalent to 26.09 percent of company capital, which includes TRY 15 million of existing capital (of which H. İbrahim Bodur Holding A.Ş. is the shareholder). Thus, a total of TRY 30 million nominal value of Group B shares will be offered to the public. However, if demand exceeds the shares offered for sale during the demand collection process, we plan to additionally offer Group B shares worth TRY 4.5 million nominal value, equivalent to 3.91 percent of company capital, to the public. In the event that all shares are sold with the secondary sale, Kalekim will have completed the public offering of Group B shares worth a total of TRY 34.5 million nominal value. This means opening 30 percent of the company to the public. As part of the public offering, the company plans to distribute at least 20 percent of distributable net profit as cash or shares."

"We will use the proceeds to grow the company"

Noting that as Kale Grubu their objective in this public offering is to make Kalekim a much larger and stronger company both nationally and internationally, Haluk Alperat stated: "We will use 60-70 percent of the proceeds from the public offering for investments to grow the company domestically and 30-40 percent internationally. Within this framework, domestically we have plans for new company acquisitions or new factory investments in concrete additives, paints, polyurethane and epoxy areas that will contribute to our existing product portfolio and support domestic growth in the construction materials sector. At the same time, by supporting our existing investments abroad and establishing local production facilities in different geographies, we aim at growth."

"We are the market leader in ceramic applications"

Timur Karaoğlu, General Manager of Kalekim, emphasizing that Kalekim created a generic brand by giving its name to the building chemicals sector, noted: "As Kalekim, according to GfK 2020 Ceramic Panel data, we are currently the market leader in ceramic applications. We conduct our production in 9 factories, 2 of which are located in Balıkesir, as well as in Istanbul, Yozgat, Isparta, Mersin, Erzurum, Mardin and Tirana, the capital of Albania. Today, Kalekim products are used in nearly one in every two buildings in our country. Beyond that, we are also one of the most important players in the international market. On the path to becoming a global brand, we bring our products to consumers and professionals in 80 different countries. We distribute our products to consumers through an extensive dealer network both domestically and internationally."

"Despite the pandemic, we increased our 2020 sales revenue by 37.9 percent"

Providing information about Kalekim's financial condition, Timur Karaoğlu noted that the company has a very solid financial structure, stating: "As Kalekim, we continue to grow by increasing our sales revenue each year. We increased our 2018 sales revenue of TRY 346 million by 10.1 percent in 2019 to TRY 381 million. In 2020, when nearly all sectors experienced contraction due to the pandemic, we increased our sales revenue by 37.9 percent, reaching total sales revenue of TRY 526 million. As of the end of 2020, our equity capital reached approximately TRY 239 million and our annual net profit approximately TRY 84 million. Now, with our strong infrastructure and 48 years of accumulated expertise, we are embarking on a new path to share the value we have created with investors. Our aim is to create a larger and stronger Kalekim domestically and internationally by combining our leadership vision in chemistry with the strength of our investors."

"The number of domestic investors has exceeded 2.5 million"

Mert Erdoğmuş, General Manager of Ak Yatırım, stated: "The Covid-19 pandemic evolved into a period in which strong stock returns were achieved with the support of monetary expansion programs of developed economies. Despite recent foreign outflows, BIST indices tested new highs in the first quarter of 2021 following strong gains in 2020. The driving force here was the number of domestic investors increasing by nearly 1 million over the past year, exceeding 2.5 million. This investor interest in the stock market presents an important opportunity window for public offerings, which have weakened in recent years.

In fact, with the Kalekim public offering, the size of funds companies have raised from equity investors since the beginning of the year will exceed TRY 7 billion. Yet in the previous year, the annual public offering size reached only TRY 1.2 billion. We had not seen a very bright picture in previous years either. If conditions remain favorable for the rest of the year, this momentum may continue. One of the most noteworthy public offerings of the year will also be the public offering of Kalekim, the "leader of Turkey's building chemicals sector".

As Ak Yatırım, with our nearly 50 years of operating history, we are proud to be the consortium leader in this prestigious public offering of Kalekim, the most established and leading company in the building chemicals sector. Thanks to our experienced teams in Corporate Finance, Sales, Research and Operations, we have successfully completed many carefully selected public offerings in which we have participated to date. I would like to mention the reasons for our confidence that the Kalekim public offering will be completed successfully. Bringing institutionalized, industry-leading companies like Kalekim with solid capital and financial structures to Borsa İstanbul is important for our country. Kalekim, which is the generic brand of the building chemicals sector, has a very broad product range from adhesives and insulation products to plaster and paint.

With strong shareholder support, Kalekim is a Kale Grubu company that includes many well-known Turkish companies including those in building products, aviation and service sectors, as well as Çanakkale Kalebodur Seramik.

From a financial performance perspective, as Timur mentioned, Kalekim has a very solid financial structure and managed to increase its profitability level compared to the previous year even during the pandemic period and as of the end of 2020 is a company with a net cash position. In light of all these points, we will be pleased to facilitate the sharing with investors of the value created by Kalekim, one of our country's valuable companies, through a successful public offering. In the Kalekim public offering, domestic individual investor allocation has been set at 68 percent, domestic institutional investor allocation at 20 percent and foreign institutional investor allocation at 10 percent. Additionally, a 2 percent allocation has been set aside for Kale Grubu employees. The price range in the Kalekim public offering has been set at TRY 13.75 – 14.75, and all investors will be entitled to receive shares at the final public offering price that will be determined within this price range. Demand collection will take place on 6 – 7 May. The offering will apply equal distribution method for individual investors. According to the price range, the public offering size equals TRY 413 million to TRY 443 million excluding secondary sale and TRY 474 million to TRY 509 million including secondary sale. The public offering, which will be carried out by a broad consortium consisting of a total of 29 institutions together with consortium leader Ak Yatırım, will involve equal ratio capital increase and joint sale. The total share ratio to be offered to the public is 26.09 percent, and we anticipate the public offering size could increase to 30 percent if the secondary sale option is exercised."