IK makes six fold return on Oriflame

Nordic private equity firm Industri Kapital has raised €225m from floating Oriflame, the first Swedish Initial Public Offering in almost two years.

Nordic private equity firm Industri Kapital (IK) has generated almost six times its 1999 investment of  €90 million (£60 million; $111 million) in Oriflame Cosmetics SA, which floated today on the Stockholm Stock Exchange.

Having originally acquired almost 40 percent of the company’s equity in 1999, alongside family founders and management, IK raised €225 million in cash today. It retains a 19 percent stake in Oriflame, valued at more than €230 million on today’s listing price. A recapitalisation last year returned €70 million to IK.

The base offering was more than 10 times oversubscribed, with an offer price of SEK190 (€20.6) per share, giving a market capitalisation of the company of  SEK11.3 billion (€1.3 billion).

The Oriflame IPO follows on from a recent disposal of shares in Nobia AB, the Swedish kitchen manufacturer, which realised eight times IK’s original equity investment.

In an interview, Christian Salamon, a Stockholm-based director at the firm, described the Oriflame IPO as “a nice exit in a series of recent exits that have returned good multiples to investors.”

Sources close to the private equity house said that its investors were pleased with the recent exit activity. It is hoped that there will be a positive knock-on effect on the firm’s ongoing fundraising campaign, the sources said.

IK is currently trying to boost investor interest in its fifth buyout fund, IK2003, which held its first close on €500 million in October 2003. The fund had an original target of €2.5 billion although it is understood that this target has been revised to €1.6 billion.