3i and Capman exit Karelia

Finnish investment house Hartwall Capital has acquired a 64 percent stake in the European flooring manufacturer in a secondary buyout.

3i and CapMan Group have sold their stakes in Estonian flooring manufacturer Karelia Corporation to Hartwall Capital, the investment arm of Finnish brewer Hartwall.

Following the transaction, which valued Karelia at €115 million ($149 million), Hartwall Capital and members of the Hartwall family will own 64 percent of the corporation. If approved by the Estonian Competition Authority, the transaction will be completed by the end of the year.

Karelia Corporation is an Estonia-based company which manufactures and sells wood and vinyl floorings in Western Europe, North America and Russia. It employs more than 650 people and last year had a turnover of €107.5 million. It was established in 2000, when private equity investors and chairman of the board Heikki Väänänen combined Oy Karelia Parketti Ltd and Upofloor.

3i and CapMan's funds invested in Karelia in 2000. Before the exit, 3i's SKF-99 Rahasto fund held 24.6 percent of the company. The CapMan funds Finnventure III, Finnventure IV, Finnmezzanine II and Finnmezzanine III held a total of 28.7 percent of the equity. Väänänen remains as chairman following the deal and has slightly increased his holding.

CapMan Group is a Nordic private equity investor specializing in mid-sized buyouts and science and technology investments. It currently manages approximately €1.2 billion in funds. Its recent investments include Tokmanni in Finland, Gammadata in Sweden, Locus in Norway and Anhydro Group in Denmark.

3i is a UK-based listed private equity house, focusing on buyouts, growth capital and venture capital in Europe, the US and Asia. In the six months to September 30th, it invested a total of €760 million.

Hartwall Capital is a Finnish investment house owned by the Hartwall family. Its largest investment to date has been in UK-based brewery Scottish & Newcastle.