Industri Kapital (IK), a European buyout firm, has sold ELFA, a distributor of electronic components, to Daetwyler, a Swiss-based international rival, after just 18 months.
IK is set to triple its original investment, recording a 90 percent internal rate of return on the SEK 2.1 billion (€222m) sale
Michael Rosenlew, a partner at IK, said: “ELFA has been a very good investment for IK. We had two tasks: to try and make the company more efficient and then to grow it. We very successful in both and slightly faster than we expected.”
He said the growth in the underlying business, which had come partly through a series of small acquisitions, was the most important contribution to the retrun.
The acquisitions included Tevalo Group in the Baltic states and Ukraine, CLL in Sweden and Øistein Røed in Norway. These had been quickly integrated, according to Rosenlew. ELFA has shown considerable growth outside Sweden and in particular has strengthened its position in Poland where it has seen strong organic growth and in Russia which has huge growth potential as an export market.
He said the next step would have been a large acquisition which would have taken three to four years to make work. Instead IK started a sale process.
“We had a good mix of interest from private equity and industrial buyers. ELFA is the regional leader and great platform,” Rosenlew said.