Ratos exits Jøtul to OpenGate in NOK 360m deal

The divestment generated an estimated net result of around SEK 40m for Ratos, and made a negative annual internal rate of return (IRR). Ratos had a holding of about 93%, prior to the sale.

A volatile market demand had a negative impact on the company during the holding period, leading to unsatisfactory sales and earnings performance, Ratos said in a statement.

Ratos said it improved production efficiency and lowered the cost base, as well as investing in product development over the last three years.

To help fund the acquisition, OpenGate raised a senior secured bond with a number of Nordic institutional investors.

The company intends to drive innovation in its product line with the fresh capital, as well as grow its customer base. 

Jøtul is the eighth acquisition from OpenGate's first institutional fund, following the firm's previous acquisitions of Power Partners, Energi Fenestration Solutions, Bois & Matériaux, Alfatherm, EverZinc, Hufcor and Mersive Technologies.

The transaction is expected to be completed during the first quarter of 2018.

Previous funding
Accent Equity Partners backed a NOK 370m management buyout of Jøtul from its corporate parent in July 2004. Den Norske Bank provided senior facilities to support the transaction.

The deal was made via Skanelv, a company in which Accent owned 56.76% of the capital and voting rights. Other investors in the company were Havfonn, Selvaag Invest and Whitecliff, with 13.33% each. In addition, Jøtul management participated with a 3.24% stake. 

A Ratos-led consortium bought Jøtul from Accent, Selvaag, Havfonn and Anchor Capital in July 2006. Ratos held 62.5%, while Accent reinvested in the business as a co-lead investor and acquired a 22.5% stake, making Ratos and Accent joint owners of the company. The management held the remaining 15%.

Ratos's equity investment was around NOK 235m and the enterprise value of Jøtul was approximately NOK 1bn. The transaction was made via newco Jøtul Group Holding.

Ratos agreed to acquire additional shares in the Norwegian wood stoves maker from Accent Equity for NOK 12m in June 2013.

Accent sold all the shares held via its Accent Equity 2003 fund. Ratos meanwhile increased its stake in Jøtul from 61% to 93%. Jøtul's management owned the remaining 7%.

Company
Founded in 1853 and based in Fredrikstad, Jøtul is a maker of wood stoves. Its procurement, marketing and product development functions are centralised in its headquarters in Norway, and it has manufacturing sites in Norway, Denmark, France and the US. The company's products are sold globally through specialised wood stove stores, as well as general DIY retailers.

Jøtul reported a turnover of NOK 898m in the financial year ending September 2017, and posted an operational EBITA of NOK 11m.

People
Ratos – Johan Rydmark (investment director).
OpenGate Capital – Andrew Nikou (founder, CEO).
Jøtul – Nils Agnar Brunborg (CEO)

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• Topics
• Buyouts
• Exits
• Nordics
• Consumer
• Norway
• Sweden
• Secondary buyout
• Ratos Holding
• OpenGate Capital