Capman makes smart card investment

The Finnish private equity house has paid an undisclosed sum to acquire a 40 per cent stake in Setex, a smart cards manufacturer sold by the Bank of Finland.

CapMan, the Finnish private equity firm listed on the Helsinki Stock Exchange, has acquired Bank of Finland’s 40 per cent stake in Setec, a Finnish developer and manufacturer of high-security smart cards and visual identity products.


The size of the transaction, which is subject to clearance by the Finnish Competition Authority, has not been disclosed.


The Bank of Finland sold a 60 per cent stake in Setec in 1998 to The Finnish National Fund for Research and Development (Sitra), Finnish Industry Investment, Varma-Sampo Mutual Pension Insurance Company, Sampo Life Insurance and Fennia Life. The management of Setec also own equity in the company. Each of the shareholders, with the exception of Fennia Life, which holds less than one per cent, plan to retain their holding in the business.


“Setec is a pioneer in technological competence and has the most sophisticated passport and identity card products on the market,” said Petri Niemi, partner at CapMan.


The firm has not disclosed how much additional capital it will provide for Setec, which reported net sales of E50.7m in 2002 and employs 418 people, although Timo Tiihonen, CapMan’s senior advisor, said the firm would back Setec’s ongoing expansion. “Our objective is to further strengthen Setec’s market position in the Nordic countries by focusing on the company’s competitiveness and working in close cooperation with its customers.”


In August last year, Apax Partners, Allianz Capital Partners and JP Morgan Chase were forced to write off their investment in Authentos, the Berlin-based company acquired in 2000 in a E1bn privatisation. Authentos ran into financial difficulty when Orga, its chipcard maker, was hit by adverse market conditions in the telecommunications industry.