Lonsdale acquires Suominen Flexibles for $20m

Mikkel Stern-Peltz
18 July 2014

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Lonsdale Capital Partners has invested тЌ20m in the management buy-in of Suominen Flexibles, the flexible packaging division of OMX-listed Finnish packaging company Suominen Corporation.

The deal included a small earnout for Suominen.

Ross Finegan, one of Lonsdale's founders, told unquote" that the firm was approached in October 2013 by Borge Kvamme, the former CEO of flexible packaging company Kobusch-Sengewald, who sought out Lonsdale for the acquisition because of co-founder Alan Dargan's experience in the paper and packaging industry.

Kvamme will be taking over as CEO of Suominen Flexibles as part of the deal, which will also see existing management take a minority stake in the company.

The firm is planning to grow the company organically for the next two years, enhanced in later stages by capex spending. Finegan added that Lonsdale is expecting bolt-ons for the company in three to four years, after the initial organic growth.

The focus of Suominen Flexibles will continue to be mainly in the Nordic region – where it counts 50% of its business – but the company will also try to grow its Polish and Russian presence.

Debt
Nordea Finland provided €7m of term loan and €2m of working capital as part of the transaction. The term loan represents approximately 1.4x run-rate EBITDA.

The deal comprised roughly €6m of vendor debt from Suominen in addition to the Nordea package.

Company
Suominen Flexibles produces flexible packaging such as bread bags, retail shopping bags and wrapping for toilet paper and tissues. More than half of the company's business is in the Nordic region, particularly Finland, Norway and Sweden, while the company also maintains a presence in Russia.

Around 50% of Suominen Flexibles' production facilities are in Poland, where the new management also plans to increase the company's presence. It employs around 437 people and had revenues of €59.4m with an operating loss of €2.2m

Suominen Corporation's history spans back to 1767 and the listed business has a market cap of €148m.

People
Ross Finegan and Alan Dargan worked on the deal for Lonsdale, along with analyst Adam Crinion. Nina Kopola is president and CEO of Suominen Corporation. Reimi Kerttula is senior vice president at Suominen Flexibles and will remain with the company, while Borge Kvamme will join the company as new CEO.

Advisers
Equity – CMS Cameron McKenna (Legal); Roschier (Legal); PwC (Financial due diligence); CiL (Commercial due diligence).