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OpenGate Capital to sell Kotkamills to Finnish PE firm MB Fund

Private equity firm OpenGate Capital is to sell one of its portfolio companies, Kotkamills Oy, to MB Funds, an independent Finnish private equity firm focused on acquisitions in the Nordic market. 

Kotkamills is located in Kotka, Finland and is a manufacturer of specialty papers and wood-based products. The transaction is expected to be complete within the next 60 days. Financial terms were not disclosed.

OpenGate Capital acquired Kotkamills from Stora Enso in July of 2010. From the onset of the acquisition, OpenGate viewed Kotkamills as a business with tremendous potential for growth and renewed profitability. In the four and a half year holding period, and under the guidance of OpenGate’s European investment team, the business achieved significant results including:

• Completed the carve-out and transition of three separate business entities into a single, integrated operation

• Successfully implemented cost optimisation and product rationalisation programs

• Re-established leadership position of the laminating paper business by enhancing innovation and developing new, environmentally friendly products to augment portfolio of papers

• Grew revenue by nearly 25%

• Increased profitability by nearly EUR14 million, growing EBITDA to a new and healthy level

Andrew Nikou, OpenGate Capital’s founder and Managing Partner, says: “I am incredibly proud of the hard work and focus that our European team applied to Kotkamills. This was one of our earlier acquisitions, and Kotkamills required significant transition and transformation work at a time when our firm had fewer resources but a clear vision for what could be accomplished. It was under the leadership of Julien Lagrèze that we achieved such success and I know the entire team at OpenGate shares in my enthusiasm.”

Julien Lagrèze, Partner at OpenGate Capital who oversees all European investment activity, says: “Since 2010, Kotkamills has undergone a series of transition, stabilisation and growth initiatives that enabled the business to adjust to changes in the paper market, respond to demands for eco-friendly products, and mitigate against the continual decline in magazine papers. Through the leadership of Kotkamills’ CEO, Tuija Suur-Hamari, the entire Kotka staff, and our strategic partner, Powerflute Oy, the business of Kotkamills today is extremely well positioned for its next phase of growth under the stewardship of MB Funds.”

Kotkamills CEO, Tuija Suur-Hamari, says: “It has been a sincere pleasure working with the team at OpenGate Capital. Under their guidance, we have been able to accomplish tremendous growth and created measurable, new value. The Kotkamills business has been transformed into a thriving and stable operation and we are well positioned for continued growth.”

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