Triton to sell Suomen Lähikauppa to Kesko

18.11.2015
  • Triton to sell Suomen Lähikauppa, a grocery retailer in the Finnish neighborhood store segment, to Kesko Food Ltd, a subsidiary of Kesko corporation, one of the leading Finnish trading sector companies
  • During the ownership Triton invested significantly in Suomen Lähikauppa's operations in order to build the company into a leading Finnish grocery retailer in the neighborhood store segment
  • The strategies of Kesko and Suomen Lähikauppa are complementary and the combined business is expected to further enhance consumer offerings in Finland
  • The completion of the acquisition is subject to the approval of the Finnish Competition and Consumer Authority and the fulfilment of the other terms and conditions of the transaction
  • The transaction price of the debt-free acquisition, structured as a share purchase, is approximately €60 million

Helsinki (Finland), 18 November 2015 - Funds advised by Triton ("Triton") today announced that they will sell the whole share capital of Suomen Lähikauppa ("SLK"), a leading Finnish grocery retailer, to Kesko Food Ltd, a subsidiary of a leading Finnish trading sector company Kesko corporation. The completion of the acquisition is subject to the approval of the Finnish Competition and Consumer Authority and the fulfilment of the other terms and conditions of the transaction. The transaction price of the debt-free acquisition, structured as a share purchase, is approximately €60 million.

"In line with its strategy, Kesko is seeking growth in the grocery trade. One of the focus areas for growth is to increase and renew the neighbourhood store network. We want to develop the accessibility, quality and price competitiveness of neighbourhood retail services that suit Finnish consumers. At the same time, the transaction will enable significant synergies. Suomen Lähikauppa has excellent business locations and the acquisition will enable us to implement our strategy faster than planned and with significantly lower capital expenditures. Competition in the Finnish grocery trade is tough and the weakening of consumers' purchasing power has intensified it," says Kesko's President and CEO Mikko Helander.

Following several years of unsatisfactory performance, Triton acquired SLK in February 2013. Triton viewed SLK as a retail turnaround situation from the beginning. The company was under-invested. Shortly after the acquisition, a comprehensive turnaround plan was put in place comprising the following four key initiatives: upgrading and investing in store network; improving store operations (store manager upgrade and new sales management model); strengthen store brands (new customer loyalty scheme and assortment strategy) and conducting selected margin improvement initiatives (automated replenishment system and private label upgrade). Many turnaround projects have been successfully implemented. The most visible changes have been the nearly 200 store renovations based on modernized store format and the PINS loyalty scheme. Total annual capital expenditure in 2013 and 2014 was €18m and €34m, respectively.

"We would like to thank the management team, the employees and all other stakeholders for their contributions to SLK's development. Triton has been the owner of SLK for nearly three years and we view this as an appropriate time for an ownership change to an industrial owner. SLK and Kesko fit well together and the combined business should have a good future. We look forward to continuing our investment activity in Finland, acting as a responsible owner and an agent of positive change in the businesses we partner with," saysPeder Prahl, Director of the General Partner to the Triton fund. 

About Triton
The Triton funds invest in and support the positive development of medium-sized businesses headquartered in Northern Europe - with a focus on Germany, Switzerland, Austria and the four Nordic countries: Denmark, Finland, Norway and Sweden. Within this European region, Triton focuses on businesses in the Industrial, Business Services and Consumer/Health sectors.

Triton seeks to contribute to the building of better businesses for the longer term. Triton and its executives wish to be agents of positive change towards sustainable operational improvements and growth. The 30 companies currently in Triton's portfolio have combined sales of over €14 billion and more than 60,000 employees.

The Triton funds are advised by dedicated teams of investment professionals based in Germany, the Nordics, the United Kingdom, Luxembourg, Jersey, Italy and China.

For further information: www.triton-partners.com

About Suomen Lähikauppa
Suomen Lähikauppa concentrates on neighbourhood services. We take care of the needs of residents in the neighbourhood, we bring together services and provide a good service experience - readily, conveniently and fast. Suomen Lähikauppa has two nationwide store chains: Siwa and Valintatalo. The network of Siwa stores is Finland's most comprehensive.

For further information: www.lahikauppa.fi

About Kesko
Kesko is a Finnish listed trading sector company. Kesko operates in the grocery trade, the home improvement and speciality goods trade and the car trade. Its divisions and chains act in close cooperation with retailer entrepreneurs and other partners. In 2014, Kesko's net sales totalled €9.1 billion and it employed nearly 20,000 people. Kesko has over 1,500 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus. Kesko's shares are listed on Nasdaq Helsinki. The company's domicile and main premises are in Helsinki. Kesko is the fifth most sustainable company in the world (The Global 100 Most Sustainable Corporations in the World).

For further information: www.kesko.fi

Press Contacts

Triton
Marcus Brans   
Head of Communications                                
+49 69 921 02204                
brans.wp@triton-partners.com

Triton's communications partner in Finland:
Tekir Oy
Anna Virrantaus
Communications Consultant
+358 40 515 5311

Suomen Lähikauppa
Ralf Holmlund
CEO of Suomen Lähikauppa                                     
+358 207 003200                   
ralf.holmlund@lahikauppa.fi