Kesko buys buildingware giant provider Onninen and increases its B2B-sales signficantly.
”We will gain lots of new, top notch expertise and expand into new product lines and new customer groups,” says Kesko’s President and CEO Mikko Helander.
Kesko Corporation has made an agreement to acquire Onninen Oy’s whole share capital from Onvest Oy. Onninen is one of the leading providers of HEPAC and electrical products and services in the Baltic Sea Region and Scandinavia. The group specialises in B2B trade and has around 150 units in Finland, Sweden, Norway, Poland, the Baltic countries and Russia. The business to be acquired from Onninen employs around 3,000 people, around 1,200 of whom work in Finland. The company’s steel business and Russian subsidiary are excluded from the acquisition.
The transaction price of the debt-free acquisition, structured as a share purchase, is 369 million EUR. The transaction will be paid in cash from Kesko’s liquid assets and available debt financing reserves.
Kesko writes the acquisition will create an excellent platform for the growth of Kesko’s building and technical trade in Finland and the rest of Europe.
As the acquisition of Onninen will especially strengthen B2B sales, the B2B-sales share of the K-Group’s building and technical trade will rise from 40 to around 60 percent. Kesko’s business in HEPAC and electrical product groups will expand significantly.
Both companies operate in the Baltic Sea Region and Scandinavian markets. After completion, the arrangement will enable Kesko to gain significant economies of scale and synergies.
“People have less time than before to carry out building projects that are technically increasingly demanding and, more than before, they want to buy ready-made building solutions. One of the key objectives of our strategy is to respond to this development. With the acquisition of Onninen we will gain lots of new, top notch expertise and expand into new product lines and new customer groups. Onninen and its strong brand will give Kesko an excellent opportunity to develop and expand sales to business customers. For Kesko, the acquisition of Onninen is a perfect match, and the 3.6 billion EUR net sales of Kesko’s building and technical trade will make it one of the leaders in the field in Europe and the most international trading sector operator in Finland,” says Kesko’s President and CEO Mikko Helander.
Maarit Toivanen-Koivisto, Chair of the Onvest Board, says it is important that Onninen remains in Finnish ownership.
Kesko estimates that the acquisition will generate around 30 million EUR in annual synergies at the EBITDA level from 2020 onwards, assuming that the acquisition is completed during the first half of 2016.
The completion of the acquisition is subject to the approval of the competition authorities and the fulfilment of the other terms and conditions of the transaction. The acquisition is estimated to be completed during the first half of 2016.