SANAKO (Finland) - Jan 2008

unquote
01 January 2008

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SANAKO, a provider of technology for live language learning, has attracted a €5m investment round from Nordic Venture Partners. The investment will be used to enhance the company’s presence in key markets, including Brazil, Russia, India and China and the Middle East. It will also strengthen its educational offering by collaborating with value network partners. The investor was attracted to the deal because of its belief in the business’ growth prospects, networks in the market and its management team. The business had recently shifted its focus from hardware-based technology to a more flexible software solution, which the investor deems to have great potential in existing and emerging markets. The business is also working on expanding its learning systems beyond languages, which will enable a larger customer group. Nordic Venture Partners became familiar with the opportunity through a previous financial backer, Eqvitec.

Company

The business dates back to 1961 when Tandberg, a Norwegian technology company, developed its first language labs. The educational division of Tandberg was acquired by Finnish Teleste in 1984. In 2001, Teleste changed name to Divace when a €13.5m MBO was completed by Eqvitec Partners, Aboa Venture Management, the Finnish Government’s pension institution (Kuntien Eläkevakuutus) and the management (January 2002, page 31). With this investment Eqvitec gained a 40% stake, while Aboa Venture Management and the Local Government’s Pensions Institution each received 17% and management obtained 10%. Teleste reinvested and maintained a 16% stake in the new group. SANAKO has developed net-driven educational software both for academic learning, but also for the professional market. It specialises in language learning technology and has around 10,000 customers and 19,000 installations worldwide. It employs 60 people and is headquartered in Turku, but also has regional offices in the US, France, the UK, the Middle East and China. It had revenues of €11.4m in 2006.

People

Nordic Venture Partners’ general partner Jukka Rauhala and investment director Juha Lehtola worked on the transaction. Rauhala will join the board of directors, together with Juha Mikkola of Eqvitec Partners, already a board member.

Advisers

Equity - Hannes Snellman, (Legal)Equity - PricewaterhouseCoopers, (Financial Due Diligence)

Sourced from: Nordic unquote" 70 (Feb 2008)