Industri Kapital Sells VSM Group to Affiliates of Kohlberg Management IV, L.L.C.
Industri Kapital (“IK”) and affiliates of Kohlberg Management IV, L.L.C. (“Kohlberg”), have signed an agreement on the sale of VSM Group Holding AB (“VSM”), a leading supplier of high end consumer sewing machines and accessories under the Husqvarna Viking and Pfaff brands. Affiliates of Kohlberg already control the well known Singer brand of household sewing machines. The transaction will be made by a holding company, to be called SVP Holdings, reflecting its ownership of the Singer, Viking and Pfaff brands.
Don Fletcher, who joined Singer following Kohlberg’s investment in September 2004, will become CEO and President of SVP Holdings. The executive management team of SVP Holdings will include representatives from both VSM and Singer. Mr. Jörgen Johansson, the current CEO of VSM, will become a senior advisor and member of the Board of Directors of SVP Holdings.
Based in Sweden, VSM markets and sells advanced sewing machines, overlocks and accessories for creative sewing worldwide. With its global brands, VSM is the leader in the premium segments of its industry. The group has 2,000 employees, manufacturing facilities in Sweden and the Czech Republic, 16 sales companies and distributors in 57 countries with the world’s largest dealer network consisting of some 4,100 sales-points. VSM has annual sales of 240 million euro.
Following IK’s acquisition of VSM from Electrolux in April 1997, IK, in close co-operation with management, transformed VSM into a leading player in the high-end segment of the sewing machine industry. During IK’s ownership the company has launched a number of strategic initiatives, including improving the product range, focusing on the high-end embroidery segment and developing after-market sales of accessories and software, whilst continuously enhancing the professional dealer network. Sales have more than doubled and profits have almost trebled.
Kim Wahl, Partner at Industri Kapital, commented: “This investment demonstrates our dedication to building best-in-class companies and improving operational performance. We have worked alongside a strong and dedicated management team to adapt the business to a niche where sewing is more of a hobby than a necessity. We have grown the company both organically and through the strategic add-on acquisition of Pfaff and we have ensured that VSM’s dealer network is the strongest in the industry”.
Jörgen Johansson, CEO of VSM, commented: “As the world leader in creative sewing we are pleased to be acquired by affiliates of Kohlberg, which, like IK, have a strong appreciation of our specialized business and organizational culture. With their support, we are eager to continue our strategy of working with our dealers to deliver a superior creative sewing experience to our customers around the world. We are confident that the combination within SVP will allow us to utilize our resources in a much more efficient manner, furthering our ability to focus on the continued innovation necessary to keep the world sewing.”
Don Fletcher, CEO of Singer, commented: “I’m delighted at the prospect of bringing VSM under the SVP umbrella. VSM’s highly advanced product development capabilities and its unsurpassed presence in the premium segment of the consumer sewing industry will be a perfect complement to our existing business, and I fully support the Company’s growth strategy. Together, our two businesses will be better positioned to respond to the needs of consumers worldwide.”
The transaction is subject to regulatory approvals.
Industri Kapital was advised by UBS, Advokatfirman Vinge and PricewaterhouseCoopers.
Kim Wahl, Partner
Phone: +47 23 11 46 57
Anne Holm Rannaleet, Partner & Information Director
Phone +46 8 678 9550
Jörgen Johansson, CEO
Phone: +46 36 14 62 28
Evan Wildstein, Kohlberg
Phone: +1 (914) 241-7430
Don Fletcher, CEO
Phone: +1 (615) 280-5205
For further information on VSM: www.vsmgroup.com
For further information on Singer: www.singer.com
About Kohlberg Management IV, L.L.C.
For further information on Kohlberg & Company: www.kohlberg.com