Private equity firm OpenGate Capital has completed the sale of Kotkamills Oy, to MB Funds, an independent Finnish private equity firm focused on acquisitions in the Nordic market.
Kotkamills, located in Kotka, Finland, is a manufacturer of specialty papers and wood-based products. Financial terms were not disclosed.
Acquired from Stora Enso in July of 2010, Kotkamills represents one of the most complex carve-out and transitions for OpenGate Capital to date. At acquisition, OpenGate launched its operations plan to consolidate Kotkamills’ five legal entities into a single business and establish entirely new IT, HR, treasury, finance, procurement, sales and logistics processes, separate from its parent company, Stora Enso.
Under the guidance of OpenGate Capital, the three Kotkamills business units also underwent three key operational improvements including:
• Repositioned a branded paper product, Solaris, from that of a commodity paper, to a specialty niche product with specific applications for publishers of magazines
• Converted the laminating paper business from a co-leader, into the world’s leader in laminating paper products through innovative research and development processes that yielded the world’s first eco-grade laminating paper product made from recycled fibre
• Leveraged the output from a saw mill to increase sales of sawn timber product
Julien Lagrèze, Partner at OpenGate Capital, says: “We saw tremendous potential to create value through the transition and operation of Kotkamills. At entry, the business was underperforming, trading slightly negative EBITDA, when just three years prior, had been producing double digit EBITDA. Through establishing a transition and operations plan prior to acquisition, identifying the right executive talent to lead the business, and by developing new and innovative products, Kotkamills is once achieving double digit performance figures.”
Kotkamills’ heritage dates back to 1872 and is recognised for its excellence in production, customer service, research, product development and sustainability efforts, and is known for products such as the Absorbex, Imprex and Solaris brands. The business has operations in Finland and Malaysia and employs more than 500 people.
