Czech investment vehicle family office R2G is reportedly buying a nonwovens part of US-based First Quality Enterprises (FQN) for over CZK10bn ($500mn), a record high investment for a Czech company in the US.

R2G, operating with investments of three Czech families, recently bought Pegas Nonwovens, a Czech artificial textiles maker. The strategy is to merge FQN, which has factories in the US and China, and Pegas to create a new company, PFNonwovens, to supply FQN.

“This acquisition will make communication with global clients in the four continents better,” R2G director Michal Smrek told Czech business daily Hospodarske noviny on May 22.

R2G's bid demonstrates the growing power of family office type structures in the Czech investment market. R2G, with funds of more than €1bn, was started in 2016 by businessman Oldrich Slemr after he and his business partner sold CGS Holding tyre group to Sweden's Trelleborg for CZK32bn in 2015.

The deal should be concluded in the third quarter of 2018. The financial side was covered by credit from CSOB and KBC. Goldman, Sachs & Co., Wachtel, Lipton, Rosen and Katz, and Dentons acted as consultants.

FQN has similar results to Pegas, which produces about 100,000 tonnes of textile per year and had sales revenue of CZK5.6bn in 2017.

Pegas is a global producer of nonwoven textiles for use primarily in disposable personal hygiene products, such as baby nappies, adult incontinence aids and feminine hygiene products. Pegas runs eight production lines in the Czech Republic, a factory in Egypt, and has plans to invest in South Africa.

Slemr reportedly put CZK15bn into R2G, which now also manages the family money of Eduard Kucera and Pavel Baudis, founders of Czech security software group Avast.