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CapMan and 3i exit from Karelia

The two private equity firms have announced they are selling their ownership in European floor manufacturer Karelia Corporation to Hartwall Capital Oy Ab and to the members of Hartwall family.

The net value of the company was reported at €115 million at the time of the transaction.

The transaction requires the approval of the Estonian Competition Authority and it is expected to be closed by the end of year 2004. CapMan funds Finnventure III, Finnventure IV, Finnmezzanine II and Finnmezzanine III and 3i fund SFK 99-Rahasto invested in Karelia Corporation in 2000. CapMan said 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.

3i Director Hannu Isohaaro said, “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 €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 €30 million to total of €115 million.”

“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 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.

CapMan specialises in Nordic mid-sized buyouts, technology investments in the IT and telecommunications sectors and investments in life science companies. The CapMan team comprises around 80 people in Helsinki, Stockholm, Copenhagen and Oslo. They currently have €1.2 billion in total capital.

3i’s buyout business concentrates on the mid and smaller buyout markets in Europe and Asia Pacific and has invested €445 million in the 6 months to September 2004. Their growth capital business has invested €207 million in the 6 months to September 2004.

Hartwall Capital Oy Ab is an investor owned by Hartwall family and is the biggest owner of Scottish & Newcastle PLC.

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