IK buys €300m Norwegian discount retailer

Industri Kapital has completed its fourth investment in Norway, acquiring the assets of a wholesale business and two discount retail chains in a deal valued at €300m.

Industri Kapital, the pan-European private equity firm with Nordic roots, has acquired 80 percent of the assets of Norwegian wholesaler Terje Høili and the franchise rights to Norwegian discount retail chains Europris and Max 20.

The value of IK’s stake was not revealed, but the transaction has an enterprise value of approximately €300 million ($370 million), according to a source close to the deal.

The current owners of the three businesses will hold a 20 percent stake in an integrated new company going forward. The new business will be trading as Ekstrem Lavpris. The three companies had a combined turnover of approximately NOK3.25 billion (€393 million; $486 million) in 2003.

The transaction was led for IK by London-based deputy director Trygve Grindheim who said in a statement: “The discount retail market in Norway possesses significant growth opportunities. Europris and Max 20 hold unique positions in the Norwegian market.”

The investment is IK’s fourth in Norway, having previously backed car rental company Liva Bil, auto components supplier Kongsberg Automotive and current portfolio company Dyno Nobel, a manufacturer of commercial explosives.

Currently investing from its €2.1 billion Industri Kapital 2000 Fund, the firm is also raising the IK 2003 Fund, its fifth. IK 2003 held an initial close on €500 million late last year. The fund is understood to have a revised target of €1.6 billion, scaled back from its initial €2.5 billion goal.