Rowico AB

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Rowico AB

HOW ROWICO AND BITC RESTRUCTURED THEIR OPERATIONS

On August 21st, the two furniture wholesalers, Trading Company Rowico AB and bitc MÖBEL AB, combined their operations. In a market in flux and following a recession, the owners of the companies jointly realized the strength of a merger. Below you can read the parties’ views expressed once the deal was finalized.

How did the deal come about?

“We started a discussion with Excore, who made an assessment of our company. We felt we were standing in at a crossroads,; either sell the company, niche it, or buy another. In the wake of the recession we felt it was unwise to stay passive. After the assessment, we asked Excore to contact others in the industry to see if any had the same view. And BITC turned out to be thinking along the same lines.”

How did you and the other party warm up to this idea?

“Excore contacted me on behalf of an, for us, anonymous industry colleague. They explained that an industry colleague might be interested in merging with us. When it later turned out to be Rowico, we were quite frankly surprised. We were almost twice as large as Rowico. But after meeting part of the management group from Rowico, we found out that we had a lot in common. We are both family businesses that have enjoyed stable development for many years, both with high solvency and good earning capacity. After a few meetings, the deal felt completely natural.”

Johnny Karlsson, CEO and owner of bitc MÖBEL AB

How does this affect your industry?

“Many colleagues in the industry are struggling today. The furniture industry has had a tough time and many are financially strained. Now when we, two strong companies, are merging, we are building a strong competitive advantage. This might be the beginning of further consolidation in the industry. But since we were first, we automatically gain the competitive edge.”

Per Lind, CFO for bitc

What’s the response from the customers?

“I’d be lying if said they were all cheering. Some were afraid they might be moving down on the priority list. But after meeting with all our major customers, we know with certainty that they see the deal as something positive. At least for now! It will be up to us, in the new, merged company, to be as good as we believe we can be. And then we will be able to increase our market share.”

Johnny Karlsson

What was the response from the organization?

“One of our biggest challenges is to get these two previously separate entities to form one powerful and effective organization that can utilize the knowledge and energy of their employees. If we can get this to work, there is reason to believe in further expansion.”

Magnus Jansson, CFO of Rowico

What is your advice to someone selling or merging their company?

“Be open to all suggestions. Don’t make any decisions until you have all the facts available. Use a business broker, they can find solutions you might not see yourself.”

Mikael Hammargren

Mikael Hammargren

Mikael Hammargren, VD och delägare av Rowico

Facts about the companies: Bitc MÖBEL AB is a furniture wholesaler that had returned revenues of 326 million SEK for the preceding fiscal year. The company was appointed as a Gazelle Company by Dagens Industri four years in a row and Super Gazell by Veckans Affärer. The main office is in Bjärnum with 42 employees. Trading Company Rowico AB is a furniture wholesaler that had returned revenues of 142 million SEK for the preceding fiscal year. The company has its head office in Halmstad with a total of 40 employees.

Johnny

Johnny Karlsson, VD och ägare av bitc MÖBEL AB

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