Trade sales reap generous returns

While the rest of Europe deliberates over to buy or not to buy, the Nordics has enjoyed a handful of lucrative exits, namely by way of trade sales:

Ratos has sold Hagglunds Drives to Bosch Rexroth for approximately SEK 4.3bn. The investor became a part owner of Hagglunds Drives together with 3i in 2001 in conjunction with the buyout of Atle. In 2004, it became the sole owner after follow-on investments totalling SEK 391m. A recapitalisation of SEK 1bn was completed in 2006, giving the investor a total profit of approximately SEK 4.4bn following the recent exit. The average annual return on the investment amounts to 56%.

Hagglunds Drives supplies hydraulic drive systems, driver motors and services for heavy duty industrial applications. The buyer is a subsidiary of German firm Robert Bosch GmbH. As an international supplier of drive and control technology, the company will contribute to the growth of Hagglunds Drives through its international network and marketing operations. (Page 42)

Only a year after its initial investment in marine propulsion system supplier Scandinavian Electric Systems, Borea has sold its stake to Rolls-Royce. The deal, valued at NOK 430m, rewarded the investor with a 7x money multiple. Borea acquired a 67% stake in 2007 for NOK 160m, investing NOK 40m of equity, with plans to develop the company over a longer period. The sales process commenced after the investor was approached by several potential buyers. Rolls-Royce was chosen based on its capabilities as an industrial partner for Scandinavian Electric. (Page 44).

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