IK sells Suomen Lähikauppa to Triton

The exit from Finland’s third largest daily goods retailer seals an active year for the firm.

Nordic specialist firm IK Investment Partners has signed an agreement to sell Suomen Lähikauppa Oy, a Finish retailer, to London-based Triton Partners for an undisclosed amount.

IK purchased Suomen Lähikauppa in 2005 through IK 2000, a €2.1 billion fund. The retailer will now be owned by Triton III, a 2009-vintage of €2.4 billion.

The purchase is an all equity deal, a source close to the matters said. IK declined to comment on the exit’s return on investment.

“We had come to a stage where we had reached significant improvement in profitability,” Kristian Kemppinen, a partner at IK’s Stockholm office, told Private Equity International. “On the backdrop of us having had the asset for 7.5 years it was now time to look for an exit.”

Suomen Lähikauppa is Finland’s third largest daily good retailers. In 2011, it had net sales of €1 billion and a 7.8 percent market share of the Finish grocery retail market.

In March 2010, IK appointed a new CEO at the company. It then led a successful turnaround strategy, by refocusing Suomen Lähikauppa on the neighbourhood store segment.

“The company at that time was involved both into neighbourhood stores and hypermarkets. But in the hypermarket segment there were bigger players who were doing the business better,” Kemppinen said. “We decided to exit the hypermarket business, focus on the core, and improve the company’s profitability.”

The company is now very profitable, he said, and fully deleveraged.

Triton intends to build on the turnaround operated over the last two years, whilst positioning the company to take advantage of growth opportunities within the neighbourhood retail market, Peder Prahl, a director at Triton, said in a statement.

The exit marks the end of an active year for IK. The firm netted a 2.3x return on its Europris sale to Nordic Capital in March, and has made three acquisitions since then.

It is currently raising its Fund 2011 with a target at €1.7 billion, after holding a first close in March at just under €1 billion.