Upsala-Ekeby

Investment entered in 1982 and terminated in 1990. Sweden

Upsala-Ekeby was a publicly traded consumer-products conglomerate which consisted of four businesses:

Rörstrand – a ceramics manufacturer,
Kosta Boda – a crystal glass manufacturer,
GAB Gense – a cutlery manufacturer, and
Solna Centrum – a real estate company.

Like many conglomerates assembled during the 1960's, the logic for combining these businesses resulted in little of the strategic or financial results originally sought by Upsala-Ekeby. The company was suffering from a shortage of capital as well as severe profitability problems and its market capitalization was significantly below the aggregate value of the individual businesses if they had been independent going concerns. Proventus undertook a comprehensive analysis of the company and concluded that the operating entities all possessed good manufacturing capabilities, strong design skills and strong brand names in their respective markets. Even so, they required additional investments to upgrade operations and restore them to their historical profitability.

After discussions with Upsala-Ekeby’s management, Proventus initiated its investment in 1982 and, through a series of transactions, acquired the entire company in 1984. In 1983, Rörstrand, the ceramics manufacturer, was sold to a Finnish industrial conglomerate and the proceeds applied to improving the manufacturing facilities, expanding the distribution networks and strengthening the product ranges of Kosta Boda and GAB Gense. Following an upgrading program, Solna Centrum real estate operation was divested in 1985.

Profitability continued to improve and Kosta Boda received international recognition for high design standards. To become internationally competitive, the Swedish crystal industry required further consolidation and in December 1989 Kosta Boda was sold to Orrefors, Kosta Boda’s main competitor and a publicly traded subsidiary of Incentive AB, a Swedish investment company. As part of the consideration, Proventus received 35% shareholding in the merged entity. In a concurrent transaction, Incentive also acquired GAB Gense.