Company Information: 

KWH Plast Ltd was a part of the KWH Group. The company is a developer, manufacturer and seller of tailor made plastic films for the packaging and labeling, food, pharmaceutical and medical industries. The premises are in Pietarsaari and their production method is extrusion. The company employs approximately 70 employees, most of which are in production.

The company's turnover was approximately 17 M €, of which 90 % was from exports mainly to Central Europe, and the operating profit had been significantly negative for many years. The main problem was that the volumes were too small in relation to the fixed costs.

Former Situation: 

KWH Plast Ltd's strengths include a strong and successful R & D, high-tech products, good machinery, a test laboratory and strong manufacturing know-how. The challenges were the poor profitability, inadequate volumes for break-even, the challenges in building foreign distribution channels and the large facility in Pietarsaari with a low utilization rate. The company's position in the value chain was also not the best possible. The company sold their products to international packaging industry companies (converters), and therefore were not able to argue their expertise and the quality of their products to end customers; international companies in the label, food and pharmaceutical industries.

KWH Group had decided that that they were no longer willing to put in future additional investments, which might be necessary. Neither did KWH Plast have any synergies with other KWH Group companies any longer. That is why the Group decided to find a new owner who would be able to offer better development opportunities for KWH Plast than the Group was able to. Because it was clear that the buyer probably would not be found in Finland, the KWH Group contacted us because of our international IMAP organization.

The Process: 

Together with our international IMAP colleagues, we conducted a market analysis of the European market and identified a large number of international companies which have the resources, know-how and distribution channels needed to support the development of KWH Plast. In addition, we obtained industry expertise from our Swiss IMAP colleague who is a specialist in this industry. Since KWH Plast had a poor profitability, we had to find a buyer who would have synergies with the company's operations and would be able to turn the company profitable. The aim was to find a strategic, industrial buyer with production and distribution channels for KWH Plast's products and who would be willing to pay for the technology.

Together with our international IMAP colleagues, we contacted 105 companies in 18 countries and 3 continents. In addition, we also contacted 20 companies in Finland. After meeting with a few potential buyers, the focus was turned on Schur Flexibles Group from Austria, which is owned by a German private equity group Capiton AG and the management of Schur. Capiton bought Schur Flexible in 2011

and implements a buy and build strategy in the company. The group consists of 9 companies that work as manufacturers and sellers of packaging materials and packaging technology know-how. The Group employs over 850 people and has operations in Germany, Austria, France, Denmark, Finland, Norway and the United States.

The transaction was carried out as an asset deal and KWH Plast, currently named KWH Plast Schur Flexibles Ltd, stayed on the same premises as a tenant on a long-term lease.

Schur Flexibles, who formerly worked mainly in high-volume products got high-tech products, that they were able to market and sell in their own distribution channels, raising at the same time their profile. Additionally, Schur moved some production from abroad to the Pietarsaari factory. Already with this move they were able to get KWH Plast profitable

The Situation Today: 

KWH Group found an owner for KWH Plast that was able to take advantage of the strengths of the company, and the employees were given the opportunity to focus on what they do best. And now the Group receives rental income, which KWH Plast was not able to pay before.

In addition, the Group has taken the extra facilities into use for the rapidly growing KWH Mirka and therefore has a very good utiliztion rate for the facility.