Norvestia Industries Ltd has continued its industrial
investment activities that first began in 2007. The aim of these is to achieve
above average market returns by developing the target companies. Our investment
horizon is long-term and there are no strict time limits set for the disposal
of these investments. We seek returns through both dividend yields and
increases in value. Our aim is to work actively with other main owners to
increase the value of the target company. This is mainly achieved through
definition of strategy in the initial stage of the investment and through
supporting board work.
AREAS OF EMPHASIS
The emphasis of our industrial investment activities
is on companies ready to step up to the next strategic level of international
business, which will be achieved by conceptualizing services. Our investment
decisions are influenced by long-term macroeconomic trends and by anticipated
changes in customer and consumer behaviour. We are particularly keen to invest
in companies and industries that have strong competitive opportunities in
domestic markets, and the potential to capitalize on their service development
innovations internationally. The target companies may also be engaged in
tangible goods if they have the potential to develop current earning models
into service concepts. Interesting areas for industrial investments are, for
example, health care, outsourcing of service processes, conceptualised expert
services, environmental technology and education services. All of these areas
offer favourable long-term development opportunities, and changes in consumer
behaviour.
PORTFOLIO COMPANIES
Coronaria Wellcare Oy
During the second quarter
of 2009, Norvestia Industries acquired a 20% stake in Coronaria Wellcare. The
terms of the acquisition had been agreed on earlier in the shareholders’
agreement between Coronaria Hoitoketju and Norvestia Industries. Coronaria
Wellcare merged with Coronaria Hoitoketju at the end of 2009. At the same time,
Jari Mäki-Runsas started as managing director in Coronaria Hoitoketju.
With the help of Coronaria Wellcare, the operations of
Hoitoketju were widened from health care services to include home care and
assisted living services to various costumer groups. Turnover of Wellcare in 2009
was approximately EUR 2.7 million and operations were profitable.
Coronaria Hoitoketju Oy
In 2008, Norvestia
Industries invested in Coronaria Hoitoketju, which is one of the leading
providers of health care manpower services in Finland. The turnover of
Coronaria Hoitoketju in 2009 was over EUR 13 million (excluding mergered
Wellcare) and growth from the previous year 23%. Norvestia Industries owns 20%
of Coronaria Hoitoketju.
Outsourcing services of health care continued to grow
in 2009. New significant customers include the cooperation contract signed by
the ODL-Hoitoketju alliance and the City of Oulu. This is the first municipal
production cooperation of health care services, which apart from monitoring and
measuring service production, also monitors and measures the effect of health
care services on specialized health care. This is a good practical example of
cooperation opportunities between health care services and specialized health
care.
GSP Group Oy
GSP Group is an expert organization specializing in
construction services, in which Norvestia Industries owns a 25% stake. The
change in strategy made in 2008, which shifted the company’s emphasis from
construction to construction management has proceeded despite challenging
market conditions. The company has gained new customers in the residential area
of Sipoonranta and in Konecranes plc among others. The financial period ending
in February 2010 will clearly be profitable for GSP Group.
MARKET SITUATION
The number of corporate
acquisitions decreased by an unparalleled amount in 2009. According to analysis
from various sources, in 2009 the number of corporate acquisitions in Finland
was lower than ever before during the 00’s. There are probably several factors
behind this. The situation on financial markets particularly from the beginning
of the year, the volatility of stock exchanges and the effect of this on buyers
and sellers’ price perception as well as companies’ emphasis on the development
of operative activity has all affected the number of corporate acquisitions.
We believe that the decrease in the number of
acquisitions of unlisted companies ended during the fall. Despite the lack of
acquisitions, activity on the markets did not come to a complete standstill.
During the year we negotiated investment opportunities with 35 different
companies. Eight of these negotiations led to concrete extended negotiations.
Apart from the investment in Coronaria Wellcare, other negotiations have not
yet led to final investment decisions. We continue to evaluate on a case by
case basis whether to invest our assets in our actively managed portfolio or
for the long-term, in unlisted companies with strong development potential.
