Larox Corporation

EQT Finland and the Vartiainen family have announced details of an agreement with the majority shareholders of Larox Corporation to delist the company from the I-list of the Helsinki Stock Exchange. Currently, the Vartiainen family controls 62% of Larox Corporation. The newco Xoral Oy has been established, in which the shares are held 50% by the family and 50% by EQT Finland. Xoral Oy will make a public tender offer for all publicly quoted B-shares of Larox Corporation. The price on offer is EUR 8.50 per share, representing a premium of 37.5% compared with the 12-month weighted average prior to the announcement. The tender period runs from 25 February 2002 until 10 April 2002. Following successful completion of the deal the total transaction value will be EUR 39m, which is being financed through equity contributions of EUR 10m from the Vartiainen family (partially a transfer of shares) and EQT Finland, and a EUR 19m senior debt package arranged by Nordea and Handelsbanken. The deal was sourced through exclusive negotiations.

Company

Larox Corporation, based in Lappeenranta, produces and markets filters and process equipment to the mining and chemical industries. It is claimed that the company’s high-performance automatic pressure filters and polishing filters expand production capabilities, simplify processes, reduce energy consumption and improve the quality of end products. Since 1997, Larox has provided equipment and after-sales service to companies in the mining and metallurgy, chemical processing and related industries. In 2000, the company’s turnover was EUR 55m, which increased to EUR 67m in 2001, generating an EBIT of EUR 5.7m. The group has 294 employees, and subsidiaries in 11 countries. The lack of liquidity of the company’s B-shares limits the availability of capital required for the future development of the company, and therefore the Vartiainen family considered the new ownership structure necessary. Together, the Vartiainen family and EQT Finland aim to build a larger solutions provider through acquisitions and other investments.

People

Andreas Tallberg (senior partner), Panu Halonen and Antti-Pekka Kääriäinen structured the deal on behalf of EQT Partners.

Advisors

Equity – Hannes Snellman, Helsinki (Legal); PricewaterhouseCoopers, Helsinki (Accounting); Bain & Co, Stockholm (Commercial due diligence); Nordea Securities, Helsinki (Payment agenda).

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