Riverside launches Nordic push

The Riverside Company, a lower mid-market buyout firm, has bought Nordic manufacturer Keycast as it builds a fully-fledged Nordic team in Stockholm.

The Riverside Company has bought Nordic manufacturer Keycast and its subsidiary Combi Wear Parts for an undisclosed sum.
Keycast is a producer of cast steel components for the mobile equipment, energy and process industries, while Combi makes parts for construction machinery. Keycast has been ramping up production in the last few years, and enjoyed strong sales growth of 30 percent in 2006.

Keycast’s management will reinvest in the company as part of the buyout, and continue their operational involvement.

Riverside recently hired Lars Eriksson, who will take responsibility for deals in the Nordic region from a new office in Stockholm. A senior transaction professional will join Eriksson soon to form a Nordic team, Riverside said in a statement.

Riverside’s latest European fund closed on €315 million – ten times the size of its previous fund. According to the buyout firm’s spokesman, this is the first pan-European fund it has raised. He said: “We opened our operations in the continent in central Europe – many people felt this was unusual, but we did so because our founder Bela Szigethy is from there.”

The buyout firm now has offices in several European cities, including Budapest, Prague, Munich and Warsaw. It has also opened Madrid and Brussels offices recently as part of its expanded pan-European focus.

Riverside has made 21 transactions this year, most recently selling Danish oil and gas robotics company Welltec Holdings to US buyout firm Summit Partners. Terms were not disclosed, but Riverside said the investment had generated a 183 percent IRR and a 9.9 times return on its original investment.

Welltec was bought from Riverside’s second European fund, which had recorded an IRR of 52 percent and a net cash-on-cash return of 2.8 times as of June 30. With the sale, the fund has now returned 284 percent of its investors’ original commitments with three companies still remaining in the portfolio.