An integrated Nordic team and strong local networks are central to our success
CapMan Buyout invests in mid-sized unlisted companies in the Nordic region. We support our portfolio companies in achieving growth, improved profitability, and stronger strategic positions.
The Buyout team had an active year during 2011, completing three new investments and making several add-on investments. The team also successfully exited from four companies and made a partial exit from two. The total amount invested was €109 million, while exits at cost totalled €159 million. As of the end of 2011, CapMan Buyout had made a total of 47 exits, with an average 3.0 return on invested capital.
During the year, we further refined our strategy as an integrated Nordic player with a strong local presence. As part of this, we focused on strengthening our position in our core markets in Finland, Sweden, and Norway and decided to close our office in Denmark.
The market environment in the Nordic region during 2011 was characterised by increasing confidence during the first half of the year followed by increased uncertainty during the second half. Financial turmoil and instability in the Eurozone towards the end of the year resulted in a tougher financing environment and led to more caution among banks in granting new loans. The tighter market reduced the appetite for M&A and led to a reduction in the number and value of transactions both in the Nordic region and across Europe.
Our strong local presence and unique opportunity to source deals across the region has proved valuable also in 2011. Despite overall uncertainty, we continued to have a good pipeline of potential new investments and several exit processes on-going during the year.
The performance of our portfolio companies remained good in 2011, despite increasing uncertainty in the global economy. Signs of a slowdown in demand began to make themselves felt towards the end of the year. However, a majority of our companies were able to achieve higher net sales and improved profitability.
Tailored value creation approach to prepare our portfolio companies for exits
The focus in our value creation work during 2011 varied across the portfolio, depending on individual companies’ sensitivity to the on-going turmoil in the marketplace. In companies operating in less cyclical sectors, we continued to promote growth along the lines of 2010. For companies with a greater degree of exposure, our focus was on building flexibility to cope with a potential drop in demand for their goods or services.
Our local presence in the Nordic countries continued to provide a solid foundation for our value creation work. We supported several of our portfolio companies during the year in building a stronger Nordic foothold or in expanding outside their local markets, both organically and through add-on acquisitions. Nice Entertainment, for example, has been able to grow from a local Finnish player into a leading independent pan-Nordic television production company during CapMan Buyout’s ownership. Read more about Nice Entertainment’s Nordic expansion here.
Going forward, we will aim to make even more effective use of our Nordic integrated team, both in deal sourcing and in driving value creation initiatives. We have strong networks in all the countries where we are present, which enables us to generate proprietary deal flow and gain access to industry expertise across a wide variety of sectors.
Against this background, our team is well-placed to continue building successful businesses throughout the Nordic region and begin fundraising for a new Buyout fund in 2012.