There were plenty of interested buyers for tech company StormGeo, but the company ultimately decided to enter a deal with Sweden’s Alfa Lava, which placed the best offer, says partner in StormGeo’s majority owner EQT to WPO. Updated.
Monday, tech company StormGeo announced that it is being acquired by Swedish Alfa Laval in a large-scale transaction.
The acquisition price is close to NOK 3.6 billion (USD 439 million), and the transaction results in StormGeo becoming part of Alfa Laval’s maritime business, informs the tech company in a press release.
“The acquisition of StormGeo will be a strong addition to our toolbox of solutions that help our customers address the decarbonization challenge in the industry. Furthermore, StormGeo fits excellently to our digital acceleration ambition,” says Tom Erixon, CEO of Alfa Laval, in the announcement.
The trade is made with the expectation of speeding up StormGeo’s digital development.
“Joining Alfa Laval, a world-leading industrial owner, benefits StormGeo by developing our business through increased geographic and technological expansion,” says Søren Andersen, CEO of StormGeo, in the press release.
Enormous interest
But Alfa Laval was not the only party interested in acquiring StormGeo, as several private equity funds and companies showed interest in the company during the sales process, says Rikke Kjær Nielsen, partner in EQT Partners, StormGeo’s majority owner.
“There was a lot of interest in buying StormGeo from other private equity funds, companies owned by private equity funds and industrial companies such as Alfa Laval. We decided to sell to Alfa Laval because Alfa Laval was deemed the best home for StormGeo, offered the best conditions and the best price,” Nielsen says to WPO.
“The plan for StormGeo is to continue to do what the company has done so far. Alfa Laval gets the opportunity to cross-sell to its customers, which could open new doors for StormGeo with new customers,” she says.
Called for consolidation
EQT is pleased with the transaction, which gives the private equity fund a solid return. The private equity fund has since Fall said that the industry called for consolidation, which has led to several acquisitions at StormGeo at the time EQT was part of the company’s ownership.
Over the past year, the tech company has carried out around nine acquisitions, StormGeo CEO Søren Andersen told WPO in October.
StormGeo
“They have been acquisitions in shipping, as we took over some activities from DNV GL, and when we acquired maritime map firm Nautisk. We’ve also bought part of a Brazilian company that is big in the Brazilian market with all kinds of weather information for TV stations and agriculture,” said Andersen at the time.
“But we’d like to get further into our customers’ operations in other industries. This could mean that we’ll need to buy up competencies. This could be customers or market shares or technology. There are many opportunities. We see interesting, digital startups that are growing,” he added.
Perfect match
At Alfa Laval, the StormGeo acquisition is perceived as a perfect match at the right time, said Alfa Laval CEO Tom Erixon Monday during a press conference shortly after the announcement.
“I do not think anyone is surprised that we are trying to drive the strongest digital development. We are on track to become the coolest kids on the block,” said Erixon during the conference.
StormGeo achieved a revenue of approximately NOK 700 million during the 12 months ending on March 2021. The operating result (EBITDA) came out to NOK 208 million. But according to Erixon, the transaction will not have a major impact on Alfa Laval’s operating result.
The merger of the two companies is expected to be completed during 2021.
