In a transaction signed on October 29, 2020, Sievi Capital Plc has agreed to purchase a majority stake in Logistikas Ltd and Logistikas Hankinta Ltd. The acquired companies will form a new group to be established in the future. The transaction was subject to the approval of the competition authorities, which was received on December 4, 2020.
Venture capital company Sievi Capital buys 70% of the shares in Logistikas companies. The previous owners, Olderman Ltd, which is wholly owned by Ari Salmi, and Werstas Works Ltd, which is wholly owned by Toni Brigatti, will remain as minority shareholders in the group to be established. Jyrki Lehti, on the other hand, is leaving the ownership.
- Logistikas is at a stage of growth where wider shoulders bring good opportunities to further accelerate our growth and expand operations to new locations and services. I believe that Sievi as an entrepreneurial, industrial owner is a good fit for Logistikas. The development of the Logistikas companies is now taking an interesting leap into the future, says Toni Brigatti, CEO of the Logistikas.
The acquisition has no personnel effects in Logistikas companies. Of the current key personnel, Ari Salmi, Chairman of the Board, will continue on the Board and Toni Brigatti as President and CEO. The company's head office will remain in Rauma and the name and logo will remain unchanged.
- The logistics industry is very interesting and it is great to get involved in implementing the next phase of company growth together with the current main shareholders. I believe that Sievi Capital's expertise and the resources it offers will help us succeed together in significant growth and development in the coming years, Sievi Capital's CEO Päivi Marttila emphasizes.
A genuine desire to develop in the long run
Sievi Capital is a listed (Nasdaq Helsinki) private equity company that makes long-term investments in small and medium-sized Finnish companies.
- We want to invest in profitable, cash flow-positive SMEs, where we see growth potential even after the moment of investment. These companies have a turnover of 15 million to 200 million euros, Marttila says.
- We typically invest 5-15 million euros and always aim for majority ownership. This will allow us to genuinely develop and inventory the new strategy together with the entrepreneurs.
Sievi Capital is a partner of the management and co-owners of the portfolio companies, which, as a long-term and active owner, supports the growth of the portfolio companies and the building of values. The company represents Finnish family entrepreneurship.
- We always invest from our own balance sheet, which allows us to keep the investment for either a few years or ten years. Always depending on how the company succeeds, how the company and the market develop, and what happens in the economy.
- We can genuinely go on company terms. So in all our investments, we talk about doing together. We are an entrepreneur-driven partner instead of seeing venture capital as a financial instrument.
Sievi Capital looks at all industries with open eyes. Common values play a big role.
- As a long-term owner, we are not very interested in cyclical industries that operate at a certain moment and in momentary ups and downs. It is important that we act in accordance with our principles of responsibility. When choosing investment targets, this means, above all, that the company must operate ethically cleanly, and the backgrounds of entrepreneurs and the company must be in order.
Organic and inorganic growth
Sievi Capital's entry enables Logistikas companies to grow stronger and develop their business in order to gain an ever-increasing market position in the growing logistics sector.
- Logistikas Ltd and Logistikas Hankinta Ltd are both great companies with good customers and good management. In the case of Finnish companies, the utilization of external logistics services is still relatively low. We see good opportunities for both organic and inorganic growth, Marttila says.
The acquisition was awaiting the approval of the competition authorities, which was obtained in early December. The steps that follow are already accurately planned.
- On the first day, we will start reshaping the company's board. This is typically the first thing we do, so we to get the right experts involved. Sure, the composition of the board may not be in its very final form at that stage, but it will start to be built in deliberate steps.
As mentioned, the current management will continue in the operations of the new group to be established, Toni Brigatti, for example, will continue to serve as the CEO.
- We will ensure that the management is properly resourced. Entrepreneur-driven companies often have shortcomings in certain resources. The aim is therefore to ensure that such shortcomings do not become an obstacle to growth anywhere. We can genuinely go on company terms. So in all our investments, we talk about doing together.
One big change will be reflected in the reporting right from the start.
- Financial reporting and other reporting in general will be carried out using the same monthly model as the reporting of all our portfolio companies. In the same way, we also implement the company's budgeting and economic forecasts for the coming months, Marttila explains.
- Financing arrangements is another matter for which we work a lot with the target companies. In this case, the financing arrangements have been renewed with the acquisition, but in the future we will be strongly involved and guide the discussion with the banks when thinking about growth financing, for example.
The third important issue Marttila highlights is the inorganic growth steps that an SME seldom has experience of. This will be an important subsidy, of which Sievi Capital will not, of course, charge any of its portfolio companies.
- In these cases, we are often, so to speak, in the driver's seat. Effective management is involved and things are discussed together in the board, but when a decision is made to take something forward, we have people to support the CEO in negotiating, planning, calculating and taking the process forward.
- We are a public company and we want to be transparent. We report quarterly on how our companies are evolving and prospering. This brings certain criteria for choosing an investment company.
The state of will is conveyed
Organic and inorganic growth are both important development targets, which Marttila says will be taken forward immediately when the final seal of the acquisition was obtained.
- We see the market as attractive in both directions. We support the company's management in implementing these development steps, Marttila emphasizes.
An expert in the logistics industry will bring a new industry to Sievi's portfolio. This may provide some level of synergy between the private equity firm’s portfolio companies, although it is not the intention itself.
- In principle, we do not think that we are buying companies that could sell or buy their services to other companies in our group. However, it is not forbidden, it is quite desirable. However, all companies operate in a market-oriented manner and on the terms under which the market operates.
- We are pleased to present the services of the new Logistikas Group to all our portfolio companies. For example, we have production companies that could potentially use these services. And one possibility is to support at other companies in internal logistics operations.
The acquisition is hardly visible in the daily lives of Logistikas companies' personnel.
- In the long run, this may be reflected in the fact that a private equity investor has a different clock frequency than others. In other words, we want to do the same things in a couple of years that someone else would spend five years on. This may appear as some kind of change, but otherwise everyday life remains familiar to the management.
- The state of will, for the fact that the company now has a desire to grow really and the resources for it are in order, will certainly be passed on to other personnel through management. I strongly believe that the same energy and joy of doing will continue in action, but now with even greater certainty, Marttila emphasizes.
Sievi Capital in brief
- Finnish publicly listed private equity company
- Become an independent company in 2012
- Publicly quoted share: Nasdaq Helsinki (trading code SIEVI)
- At the heart of the strategy is the creation of shareholder value and capital investments in unlisted small and medium-sized Finnish companies
- A partner for the management and co-owners of the portfolio companies, who, as an active owner, supports the growth, profitability and value building of the companies
- Aim to be the most desirable partner for entrepreneurs and other key personnel in potential portfolio companies to achieve a significant growth spike and increase corporate value