The business
Vinovo is the parent company of a group that consists of the operational businesses Nordic Flanges, Ferral, ÖrnalpUnozon and RAMAB. The companies are structured into the business areas ViLink (Nordic Flanges and Ferral) and ViFlow (ÖrnalpUnozon and RAMAB).
Vinovo's business can be split into two main processes:
The CEO has the overall responsibility for both processes, but has active support from Vinovo's Board, which also works with the management and ownership issues of the portfolio companies and finding new investment opportunities. Vinovo's operations are run in a cost-effective manner at a group management level. When the need arises, Vinovo buys in the necessary external services, primarily financial and legal services when making acquisitions. The portfolio companies have their own finance and administration divisions and are run independently.
Vinovo's investment philosophy is based on investing in operational businesses with documented profitability and good cash flow and with unique positions in their respective market sectors, which gives the companies the scope to continue generating a strong, stable cash flow. Vinovo has no sector preference, but will evaluate investments within a wide range of sectors. The company's primary investment markets are Sweden and the rest of the Nordic region, though there is no obstacle to investments outside the region, especially when it comes to supplementary acquisitions to strengthen the existing portfolio companies.
Identifying
Vinovo actively works with a network of consultants, lawyers, auditors, brokers, banks and other advisors that regularly present investment proposals and ideas. The company works hard to broaden this network in order to constantly increase the flow of new possible investments. Furthermore, it is our aim that the management and staff of the portfolio companies become important sources for identifying and evaluating potential new acquisitions.
As well as seeking ideas and proposals from our network, Vinovo strives to identify acquisition candidates through quantitative and qualitative analyses of companies in different market sectors and according to our investment criteria. The two large campaigns sent out to potential acquisition objects during the last two years are examples of this.
Vinovo endeavours to maintain a constant dialogue with a number of interesting acquisition candidates and thus becomes a natural aid the day a sale becomes imminent. Vinovo is currently in discussions with several acquisition candidates from different sectors and different parts of the Nordic region.
Evaluating
Having been identified, potential acquisitions are evaluated according to a number of parameters in order to assess if the conditions are in place to meet Vinovo's investment criteria. The evaluation phase involves a more detailed dialogue with the owners and management of the potential acquisition.
Negotiating/structuring
The intention with this phase is to ensure that the acquisition can be carried out at a price where the deal will create value, that the deal is structured in such a manner that suits both Vinovo and the seller and that the appropriate financing is attained. It is also important to find a structure that allows the sellers and the management to participate in the continued development of the portfolio company.
In parallel with the negotiation phase, Vinovo will carry out the customary due diligence, using qualified external consultants to identify specific technical, fiscal, financial, environmental and legal risks and opportunities.
The goal with most of the investments is to acquire a majority holding in the portfolio company, though smaller share acquisitions may occur in exceptional cases.
Vinovo's ambition is to obtain a financial structure with each investment that maximises potential yield without jeopardising the financial status. This is done in every investment case with the appropriate combination of external bank financing, possible seller's promissory notes and shareholder equity.
Managing and developing
When making an acquisition, Vinovo and the management in the target company carry out a structured analysis of the operations and a strategy and business plan are drawn up as well as financial and operational goals. Follow-up and control routines are also made in order to be able to follow the development of the portfolio company towards the goals that have been set.
Vinovo has a long-term approach to the development of its portfolio companies, carefully monitoring their financial and operational development with continuous reporting. Vinovo also exercises its ownership through active Board representation. The Boards are adapted to the respective portfolio companies' characteristics and comprise both representatives from Vinovo and external members.
Vinovo actively assists its portfolio companies by, for example:
- providing experience in implementing development and expansion strategies
- identifying, structuring and carrying out acquisitions,
- financing both acquisitions and organic growth.
Vinovo has no defined exit strategy for its holdings.