Doughty Hanson, the European private equity firm, has made its first investment in the Benelux region with the acquisition of Balta, the world's largest rug manufacturer.

Doughty, advised by Fortis Bank, is paying around €420m ($506m) for 70% of Balta in a deal that values the business at €600m. Doughty will put in 30% equity with the balance in debt provided by Credit Suisse First Boston and the Royal Bank of Scotland.