HIG Europe acquires Fågelviksgruppen

The enterprise value of the deal is estimated to be between SEK 2-3bn, around 10x the company's SEK 200m EBITDA in 2013, according to Swedish media. The same sources estimate the transaction to be leveraged at around 50-70%.

HIG confirmed to unquote" the deal was made through its 2013-vintage €825m HIG Europe capital Partners II fund, but declined to comment on the financial details.

Following HIG's buyout, Ole Oftedal will replace owner Rolf Gustav Karlsson as CEO of FVG, bringing experience from stints as chief executive for in the transportation and travel industries.

While Karlsson will be replaced, the rest of the management team in place before the sale will remain, and buy into the structure of the newco.

HIG director Johan Pernvi has told unquote" the size of the management's buy-in is typical for a transaction of this type.

He has also revealed the GP's immediate strategy for FVG is to focus primarily on national expansion in the group's current markets of Sweden and Norway through a combination of organic growth and acquisitions. Pernvi says international expansion may follow, but it is not the company's first priority.

HIG's investment comes at a time where the Nordic taxi industry is seeing some change. In the past year, taxi competitor and ride-share app Uber has tried – so far unsuccessfully – to break into the market in the same manner it has done elsewhere in Europe and in the US. Similarly, Danish taxi booking app Drivr has had problems with the well-established and organised taxi industry in Denmark.

Pernvi believes now is an interesting time to invest in the sector, given the high level of development and change currently happening, with FVG's size and large market share providing a good position from which to develop.

Despite the questions posed by Uber and the technological developments taking place, HIG still considers the Nordic taxi market to be a fairly large, very stable market overall.

The GP and management will work to consolidate and expand FVG's position in the market, through developing the company's technological offerings, increasing efficiency and improving back-office technology, among other aspects, according to Pernvi.

The transaction has been approved by the Swedish competition authorities, but had been met with some trepidation by the Swedish Transport Workers' Union, which expressed concerns about taxi drivers' working conditions changing under private equity ownership.

Pernvi says the GP had been very aware of the transport union's concerns throughout the due diligence process, adding that HIG sees a need for collective bargaining. The GP will continuously work with the transport unions during its ownership to find solutions to any issues and concerns that arise from either party, he says.

FVG is HIG's second deal in the Nordic region, following its 2013 buyout of consumer loan broker Freedom Finance. Pernvi says the GP has built its presence in the region in recent years and will continue to expand with the expectation of doing more business throughout the Nordics countries.

He told unquote" that HIG's attraction to the Nordic countries is due to the region's well-developed, strong, stable economies, and the fact there are plenty of privately held companies in the GP's mid-cap target market.

Company
Founded in 2002, FVG owns several taxi brands in Sweden and Norway, including Taxi Kurir, 020, Norges Taxi and Taxi Skåne. The Stockholm-based company provides technology, brand affiliation and services including fare allocation and dispatch services to its 5,000 taxis in the region.

People
Carl Harring is a managing director at HIG Europe and worked on the deal with HIG director Johan Pernvi. Ole Oftedal is the new CEO of FVG. Rolf Gustav Karlsson is the former owner and CEO of FVG.

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• Topics
• Nordics
• Buyouts
• Consumer
• Sweden
• HIG Europe
• Unq2015May