Press release - 17 November 2004
CapMan and 3i sell Karelia Corporation to Hartwall family
Funds managed/advised by CapMan and 3i and some private persons will sell their ownership in Karelia Corporation to Hartwall Capital Oy Ab and to the members of Hartwall family. Karelia Corporation is one of the leading flooring manufacturers in Europe. Following the share sales and purchases the holding of Hartwall grows to approximately 64% of the paid up share capital of Karelia Corporation. The net value of the company is about EUR 115 million at the time of the transaction. This exit will have no effect on CapMan’s result for the year 2004.
The transaction requires the approval of the Estonian Competition Authority and it is expected to be closed by the end of year 2004. Prior the transaction, the CapMan funds owned 28.7% and 3i fund SFK-99 Rahasto 24.6% of Karelia Corporation. Karelia Corporation’s Chairman of the Board, Industrial counsellor Heikki Väänänen will continue as Chairman of the Board and as a shareholder after the transaction. In addition, Mr. Väänänen slightly increases his holding in the company in connection of the transaction.
Subsidiaries of Karelia Corporation are FinnWoodFloors Oy, which is responsible for the production and marketing of Karelia and Upofloor wood floorings, and Upofloor Oy, which manufactures and markets Upofloor vinyl floorings. CapMan funds Finnventure III, Finnventure IV, Finnmezzanine II and Finnmezzanine III and 3i fund SFK 99-Rahasto invested in Karelia Corporation in 2000. At the moment Karelia Corporation has a strong market position and it is one of the best performers within European flooring business. The profitability has been excellent throughout the investment period.
“Karelia Corporation was established in 2000, when private equity investors and Heikki Väänänen combined Oy Karelia Parketti Ltd and Upofloor Oy. Since our investment, the company’s investments have totalled over EUR 36 million. The biggest investments were made at the Karelia Corporation’s factory in Kuopio. The investments were made during time when Finnish economy was bearish. During this same period the company’s turnover has increased by EUR 30 million to total of EUR 115 million,” says Director Hannu Isohaaro at 3i.
“Karelia Corporation has been a profitable and interesting investment and the company has very promising future outlook. We are very pleased that the ownership will remain in Finland and that the Hartwall family will continue to support the long-term development of Karelia Corporation,” says Tuomo Raasio, Senior Partner at CapMan.
Hartwall Capital and Heikki Väänänen have together decided to develop Karelia Corporation operations in the long-term. “Karelia Corporation has all prerequisites to further grow at the already stable market and enter new and developing export markets in the flooring business,” Chairman Heikki Väänänen from Karelia.
”Hartwall family’s brewery ownership has changed into a minority shareholding on large international brewery company. To continue our 200 years of industrial experience, the family has seeked for interesting Finnish export companies as investing targets. In Karelia Corporation we saw a very promising company which has Finnish top class products and know-how. Karelia Corporation has also very good growth potential in the international markets,” says Hartwall’s Chairman of the Board Erik Hartwall.
This exit will bring CapMan’s Finnventure IV, Finnventure V and Finnmezzanine III funds closer to the stage where they will start generating carried interest. This exit will have no effect on CapMan’s result for the year 2004.
For additional information, please contact:
Tuomo Raasio, Senior Partner, CapMan, tel. +358 9 6155 8305
Hannu Isohaaro, Director, 3i Finland Oy, tel. +358 400 406 063
Heikki Väänänen, Chairman of the Board, Karelia Corporation, tel. +358 40 752 9111
Klaus Grönbärj, Managing Director, Hartwall Capital Oy Ab, tel. +358 50 5505744
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