KKR sells Välinge to Kirkbi

The business is valued at $1bn after KKR's initial investment of $200m, according to a source close to the situation.

The deal saw a money multiple of 2.5x for KKR, the source added.

In media report, the value of the deal has been estimated at $500m, according to a report in the Financial Times.

Kirkbi, owned by the Kirk Kristiansen family, will acquire KKR's 49.8% stake in Välinge. The firm's founding Pervan family maintains its 50.2% majority ownership via its holding and investment company Pervanovo Invest.

With the additional capital, Välinge intends to support the international commercialisation of its technology and products.

The deal ends a two-year holding period for KKR, which bought a stake in the firm via its KKR European Fund IV.

Previous funding
In February 2016, KKR acquired a 50% stake in Välinge from three vendors. The deal saw the GP buy two 20% stakes from minority shareholders. One was from Austrian wood-based panel manufacturer Kronospan and the second from Swiss Krono Group, a Luzern-based wood products group. Both remained substantial licensees of Välinge's technology. Although the price paid was not disclosed, the Swedish press estimated the company to be worth SEK 5-6bn.

Part of the stake (10%) was acquired from the Pervan family and CEO Darko Pervan, who founded the company.

Capital for the deal was drawn primarily from KKR's European Fund IV. Välinge used the capital to invest in the development of technologies in areas including luxury vinyl tile flooring, digital micro 3D printing and wood powder technology.

Välinge was previously backed by private equity, with Swedish investment company Nordstjernan acquiring a 23% stake in 2002, expanding to 50% in 2004, before selling 10% each to Kronospan and Swiss Krono Group.

Nordstjernan's involvement in Välinge was marred by conflict with the owning family and CEO Darko Pervan, according to previous unquote" data reports. The investor attempted to fire Pervan and replace him with CFO Bobby Markowski, who was in turn fired by Pervan when the attempted leadership change came to light.

The disagreement between the two shareholders eventually spelled the end of a planned IPO, and the Pervan family reacquired the 30% stake held by Nordstjernan, while Kronospan and Swiss Krono Group retained their combined 40% holding.

Company
Founded in 1993 and headquartered in Viken, Sweden, Välinge is an R&D and intellectual property business specialising in wood-based technologies and the flooring and furniture sectors.

Välinge has a patent portfolio composed of 1,800 patents and 200 global licences.

The company employs 100 people and is projecting a revenue of €120m for 2017 with an EBITDA margin in excess of 50%.

People
KKR – Anders Borg (managing director).
Välinge Group – Niclas Håkansson (CEO). 
Kirkbi – Thomas Lau Schleicher (CIO).

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