MB Funds invests in motor inspection platform

The Finnish private equity firm has funded the E59m privatisation of FMVI, a Finnish motor vehicle inspection unit in preparation of an international buy-and-build in the sector.

MB Funds, the Finnish private equity firm, has acquired Suomen Autokatsastus (SA), the Finnish motor vehicle inspection company in a privatisation transaction from the Finnish government.

 

MB Funds has agreed to pay E59m for the business, which reported net sales of around E62m in 2002. Inspection services are the main business of Suomen Autokatsastus, although the company also carries out other services including vehicle registrations and drivers’ examinations. The company employs over 1000 inspectors and has around 150 inspection stations across Finland.

 

The inspection industry was deregulated by the Finnish government in 1994 and dozens of competitors have since entered the market. Despite deregulation, Suomen Autokatsastus currently has a market share of approximately 64 per cent of the inspection business.

 

MB is planning to create an international inspection company based around Suomen Autokatsastus, which already operates in the Baltic countries, Poland and Russia. “MB Funds wants to invest in this business sector and develop it further. We are continuously looking for new purchase and outsourcing targets in the technical inspection sector,” said Hannu Puhakka, partner at MB Funds.

 

Last October, the firm implemented a buy and build transaction in which Inspecta, a technical testing and inspection organisation, and SFS-Sertifiointi, which provides certification services, were merged. MB Funds has a majority holding in the merged business, which reported net sales last year of E26m and employs 300 people. “There are no immediate plans to merge Inspecta with Suomen Autokatsastus,” added Puhakka, “although there are definite synergies which could be beneficial at a later date.”

 

Nordea Securties advised the government on the deal.

 

MB Funds manages over E200m in investments. The firm’s investors include Finnish insurance companies, pension funds and public and private institutions.