Adelis acquires majority stake in Westpack from Capidea

The company's management and key employees also invested for a 17% stake; however, financials were not disclosed.

Adelis is investing through Adelis Equity Partners II, which closed on EUR 600m in June 2017 after just three months on the road, according to Unquote Data.

Danish private equity firm Capidea acquired a majority stake in Westpack in 2017. Prior to the transaction, Westpack was primarily owned by brothers Soren Skou Mogensen and Ole Buhl Mogensen, as well as the current CEO, Morten Dalsgaard.

Mergermarket reported in October 2021 that first-round bids were collected for Westpack in an auction led by PwC. The company was being marketed based on EBITDA of approximately EUR 6.7m and had revenues of around DKK 290m, according to Mergermarket. Speaking to Unquote, Martin Welna, a partner at Adelis, confirmed the EBITDA figure was roughly correct. He also added: "Capidea held a 51% stake in Westpack and a board member had around a 10% stake. We will buy out Capidea and the larger board member, and we will own an 83% stake, while the management team will reinvest for 17%."

Welna told Unquote: "I have followed Westpack for a while. Ultimately, the owners launched a structured sale process and we were one of the invited parties to the process. There were several firms that bid for them; however, we managed to gain exclusivity during the process and the final due diligence."

The packaging sector appeals to Adelis, for several reasons, says Welna: "Firstly, we see that many goods – jewellery, eyewear and watches – are selling online. When goods are moved online it presents situations where packaging increasingly becomes a part of the customer experience. We liked Westpack because it has outgrown the market for many years, but still has room to grow. They have proven their market model is strong."

Welna further added: "Westpack has two legs in their business. The first leg serves larger brands, and the other serves retail businesses where they sell to small jewellery stores, physical and online stores. The strategy we will adopt is to grow both these areas. In relation to the first leg, the brand-customer is becoming increasingly aware of ESG aspects, and supply chains are really important to them. Westpack is a frontrunner on the ESG part, they are very comprehensive on this compared to their competitors. They have their own production in Denmark, which is an advantage, as well as sourcing networks in Asia and eastern Europe. They have the ability to support their customers with their Denmark-based production. We have seen a lot of brand customers using Asia-based productions, but now they are seeking more suppliers nearby in case there are disruptions in Asia. Our strategy involves international organic expansion, which is the key plan. Secondly, we will evaluate acquisitions along the way on a selective basis. But the company has been good in delivering organic growth so we will focus on that."

Adelis's recent fund, Adelis III, closed on EUR 932m in October 2021. The fund strategy involves acquiring companies with revenues of EUR 10m-300m along with its management teams and owners. Its sector focus includes technology services and software, business services, and life sciences. Adelis has historically favoured investments in companies with enterprise values of EUR 20m-200m while reserving additional equity in the fund for potential add-ons, according to Unquote.

Company
Westpack was founded in 1953 by the Mogensen family and is headquartered in Holstebro, Denmark. It is a provider of packaging to luxury brands like Pandora and smaller B2B retail brands. It specialises in packaging for jewellery, eyewear and watches. It employs approximately 180 people, of whom 150 are employed in Denmark and 30 in Asia.

People
Adelis Equity Partners – Martin Welna, Joel Russ (partners).
Westpack – Morten Dalgaard (CEO).

Advisers
Vendor – PwC (corporate finance).

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• Topics
• Buyouts
• Exits
• Nordics
• Industrials
• Secondary buyout
• Denmark
• Adelis Equity Partners
• Capidea Management