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SKA

HOW GNOSJÖGRUPPEN SOLD THEIR GERMAN SUBSIDIARY IN TWO MONTHS

June 3rd, 2010 Gnosjögruppen signed the final agreement to sell their German subsidiary, SKA. On a competitive market with tough clients in the automotive industry and in the wake of a deep recession, Gnosjögruppen managed to sell its German subsidiary and a property in Anderstorp in record time. Below Torbjörn Browall, CEO of Gnosjögruppen, answers questions about how they accomplished this.

What was the reason for the sale?

The 6th AP-Fund has owned Gnosjögruppen for a number of years. Initially, the idea was to only own part of the company, but during the recession the Fund had to step in and assume greater ownership responsibilities. To be able to invest for the future, the Board of Gnosjögruppen decided to sell off certain parts to increase liquidity. Selling the German subsidiary along with an industrial building in Anderstorp was the easiest solution.

What was important when making the deal?

As always, the price was important, but so was finding the right type of buyer. In this case other components included that it would happen quickly, that the process would be smooth and not least, that it would be kept secret.

What did you do?

Initially I began by sending out feelers among brokers and previous stakeholders. Among them were Excore, who I must say, distinguished themselves. They understood immediately what was involved, and within a week proposed an agreement that was beneficial for us.

Why did this happen so quickly?

I must give Excore credit for that. In a very short time they presented a buyer and a tentative offer. An offer well in line with what we were looking for.

Is that the whole truth?

No, clearly not. Internally, we had already prepared for a sale, so financial numbers and other relevant information was already in place.

What, in the process, did not turn out according to plan?

The buyer had a complaint about the condition of the building and, at about the same time, there were some issues over an expensive piece of machinery in Germany. As is normal, we each presented our views and then met somewhere in the middle. In retrospect, I don’t think there were any losers; I believe both parties left the negotiations as winners.

What was the response from the German organisation?

As usual, a change in ownership always generates a few worries. Although for the most part this process is perceived positively. The new owner had already indicated they intend to invest in the operation, so new machinery can be utilized in order to expand on the German market. It’s in the organization’s best interest to find an owner like this.

What would be your first piece of advice for someone considering selling their company?

Consider carefully what is most important to you. Then present that to your broker so they can adjust their process accordingly. After all, your company should be sold on your terms.

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Facts about the owner:
Gnosjögruppen turnover of approximately 1 billion and has approximately 700 employees in Sweden, Slovakia, Hong Kong and Germany.

Facts about the property in Anderstorp:
An industrial building with a total area of 11,000 m2. YTAB is already tenant and after the deal, Gnosjögruppen become a tenant aswell.

Facts about SKA, the company sold:
With headquarters in Attendorn, Germany, SKA acting subcontractor to the German automotive industry. The products are mostly used in seat belts and other safety products. The company has annual sales of approximately 170 M USD with 50 employees.

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