In June 2008, Reiten & Co, an Oslo based mid-cap buyout firm, announced the sale of portfolio company SafeRoad to Nordic Capital. During their three years of ownership, Reiten completed a successful buy and build strategy. This involved an impressive 16 add-ons. Overall revenues were increased by over 4x and EBITDA by nearly 6x. Reiten’s ROI was 5.2x cost with an IRR of 90%.
SafeRoad grew from being a local player in primarily Norway, to become one of Europe’s largest traffic safety suppliers and the one with the most complete product and services offering.
Through close and active cooperation with the management and the other shareholders we have achieved a lot in a short time.
Christian Melby Partner, Reiten & Co
What did the business need?
- Realise potential and become pan-European traffic safety market leader
- Organic expansion through additional capital to drive growth strategy
- Roll-up of a highly fragmented industry to improve market conditions and efficiency
- Build management structure & creation of new jobs to meet demand
- Cost saving initiatives and efficiency drives
How did private equity backing create lasting value?
- Product offering extended geographically into new regions (Sweden/Denmark/Eastern Europe/UK)
- Product range expanded (e.g. infrastructure & electronic signs)
- Economies of scale (Improved sourcing and synergies)
What outcomes did private equity investment achieve?
- Became total pan-European supplier of traffic safety systems
- Became market leader in this region.
- Revenue increase from NOK550m to NOK2300m
- EBITDA increase from NOK50m to NOK290m
- Workforce increase from 390 employees to 1350