FSN wins €87m in arbitration ruling against Procuritas

The ruling against the Swedish PE firm was announced yesterday and comes nearly two years after FSN sued Procuritas. 

Procuritas sold its former portfolio company Gram Equipment, a Danish ice cream equipment manufacturer, to FSN in January 2018. Shortly after the deal, Gram Equipment's statutory auditors, EY, uncovered accounting irregularities in the company's books and records.

According to information provided to FSN prior to the deal, Gram Equipment had seen €107.4m in revenues and €13.3m in EBITDA for 2017. 

However, audited accounts in July that year revealed Gram's revenues to be €94m and the EBITDA had changed from a profit of €13.3m to a loss of €8.5m for 2017.

FSN Capital has since injected more than €23m in additional funds to safeguard continued operations and avoid bankruptcy. It also replaced the former management team. 

FSN said that the €87m compensation will go towards creating additional jobs at Gram Equipment and for its further growth. 

A consortium of 12 underwriters led by Liberty GTS paid €50m to FSN a year ago under a warranty and indemnity liability insurance related to the losses incurred in connection with FSN's acquisition of Gram. The payment was made to FSN Capital V, the €1bn buyout fund that provided equity for the original buyout.

FSN stated at the time that it would continue to pursue claims against the seller and former top management as the €50m insurance limit did not cover its full loss.

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• Topics
• GPs
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• Procuritas
• FSN Capital