IK sells Paroc to Banc of America

Partek Corporation, which is part of global engineering company Kone, will also be selling its 38 per cent interest in the firm. The sale is in line with Kone’s strategy to divest Partek’s non-core assets in an effort to focus on its core business. Management will have an option to continue their ownership in Paroc.

The price of the sale by Industri Kapital has not been disclosed, although Michael Rosenlew, director of Industri Kapital, described the deal as “successful”. In the three years since Industri Kapital acquired its 47 per cent stake in 1999, Paroc, whose products include building insulation and structural stone wool sandwich panels, has increased its net sales by a little over 10 per cent, to E281m in 2001.

Under Industri Kapital’s ownership, Paroc, which has 1,800 employees, has expanded in Eastern Europe and made considerable investments, especially in Poland where the firm has built new production lines. Industri Kapital has also changed the company’s focus from bulk to more value-added products such as sandwich panels and technical insulation products.

Banc of America Equity Partners approached Industri Kapital at the beginning of the year to see whether a deal might be on. “This was a proactive approach by Bank of America. We had nothing against selling the company. We had reached a certain stage in the development of the company, so the timing was perfect from a strategic point of view,” said Rosenlew.

The sale of Paroc is subject regulatory approvals in Finland and in some other countries. The transaction is expected to be completed in early 2003.

The exit follows Nordic private equity group Capman’s E270m buyout of Nordkalk, the Finnish limestone-based products producer, from Partek at the beginning of the month.