Growth of the world’s leading producer of thermally modified timber is boosted
CapMan and the minority shareholders have sold Lunawood to funds managed by Accent Equity Partners.
Lunawood is one of the pioneers of thermally modified timber (TMT) and has developed into the leading global player in softwood thermowood. TMT is a much more sustainable alternative to traditional wood products, such as impregnated wood and tropical hardwood, and an excellent choice for decorative surfaces. Lunawood’s products, which are sold in 50 countries, are primarily used for cladding and facades but also for decking, landscaping and interior design. Under the ownership of CapMan’s funds Lunawood’s revenues have grown annually by 14% (average annual growth rate) since 2010 and now amount to approximately US$55 million. Accent Equity Partners will support Lunawood’s ambition for continued international growth, both organically and through add-on acquisitions.
We are pleased to have sold Lunawood to Accent Equity Partners after a period of strong growth during our ownership. Oaklins’ team in Finland did a great job in supporting both the owner and the management throughout the competitive sale process. The team was able to find the right buyer to support Lunawood’s continued growth.ANDERS HOLMÉN, INVESTMENT DIRECTOR, CAPMAN OYJ, FINLAND
CapMan is a leading private equity firm in the Nordic region. It has developed hundreds of companies and created substantial value over the past 30 years. The firm has over US$3 billion in assets under management. Its investment strategy covers private equity, real estate and infrastructure.
Market trends & deal drivers
TMT is a sub-segment in the wider markets of the building materials and the construction industries. The TMT market has significantly outpaced the growth of the general construction materials market and is expected to continue its rapid growth for the foreseeable future. As a general trend, the use of wood in construction is expected to continue to increase. Furthermore, TMT is expected to replace other woodbased materials, as well as other construction materials, in both facades and decking, driven by sustainability and other major trends, such as:
- Urbanization and increasing regulation – Strong trends towards urbanization and wood construction are key drivers, with increasing regulation playing into the hands of wood and TMT producers.
- Increasing environmental awareness – Awareness is rising among architects and developers regarding the construction industry’s contribution to climate change and its environmental footprint.
- Rise of natural products – TMT is gaining in popularity as an environmentally friendly and sustainable solution, compared with chemically treated timber and tropical woods.
- Improving standard of living – TMT is still a relatively new product, with increasing recognition for its characteristics, and it is gaining market share.
M&A Valuation aspects
The specific metrics of this transaction are confidential. However, it should be noted that the company received interest from both strategic and financial investors. Key drivers behind the interest and valuation of the business were strong margins compared with the overall wooden building materials sector, the company’s leading market position and the long-term stable growth of the underlying TMT market.
Oaklins found the best partner to develop the business
Oaklins’ team in Finland advised Lunawood’s shareholders on its sale to the investment fund Accent Equity Partners. Oaklins’ global reach and extensive industrial expertise in the building materials sector was crucial in providing all the necessary support to Lunawood’s private equity owner throughout the exit process and ensured a smooth transition of ownership and continuous international expansion for the company.
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