Cinven and GS Capital Partners (‘GSCP’), today announce that they have entered into a definite agreement to sell Ahlsell (the ‘Company’), the leading distributor of construction products in the Nordic region, to CVC Capital Partners for an enterprise value of SEK 15.5 billion (€1.8 billion).

Prior to the January 2006 acquisition, Cinven and GSCP had identified Ahlsell as an excellent platform for growth and continued consolidation of the Nordic construction supplies market with leading customer service and competitively priced products.

During the course of our ownership, the Company’s management team, with the expertise and support of Cinven and GSCP, has executed on these strategic goals through:

  • the acquisition of 25 companies in the region to create a leading pan-Nordic business footprint, the most recent being that of NEA Elmaterial AB, a Swedish electrical distributor, which reinforced Ahlsell’s leadership within electricals in Sweden;
  • improved procurement processes, including an increase in Asian sourcing and consolidating the Company’s supplier base in order to be able to provide quality products at highly competitive prices;
  • significant investment in capital expenditure, including most recently Ahlsell’s highly sophisticated, centralised warehousing facility in Norway that has created value for customers through best-in-class distribution and customer service; and
  • increased diversification of the business through continued growth in particular in the tools & machinery segment, and the divestment of non-core assets, to create a more focused and streamlined operation.

The result of these investments and Ahlsell’s strategic expansion is a business that is a regional leader in its market, and one that has performed strongly, even during difficult market conditions.  In the 12 months to 31 December 2011, Ahlsell grew revenues by 6.1% to SEK 20.4 billion (€2.3.billion) and EBITDA by 28.2% to SEK 1.7 billion (€192 million).

Commenting on the transaction, Guy Davison, a Partner at Cinven, said:

“When we acquired Ahlsell in 2006 we found a great business with an ambitious management team and a market leading position in the Nordic region. During our ownership, we worked with Ahlsell’s management team and workforce to drive real change in the business through smarter sourcing of products, selective acquisitions and significant capital expenditure, all to reinforce the company’s pan-Nordic leadership.

Despite trading through one of the worst global recessions in living memory, Ahlsell has delivered very strong revenue and earnings growth during our ownership, with resilient margins and healthy cashflow generation. This achievement is testament to the enduring quality of the business, its management and people, and ensures that the business is very well placed to continue its growth.”

Steven Sher, Managing Director GSCP added:

“Since 2006, with our partner Cinven and the management team, we have grown Ahlsell both organically and through acquisition, while investing significantly in its operations to ensure it has become the company we believed it could be.  The success that management has achieved in building value for all stakeholders, means that the company is now a leader in its respective markets, and well-positioned to capture further growth in the future.”

The completion of the transaction is subject to customary competition clearances.

Cinven and GSCP were advised on the transaction by Goldman Sachs and Nordea.