23 Feb 2017 11:30

Long and broad relationship marked by trust

Teo Ottola at Konecranes

Finland’s Konecranes in January finalised the acquisition of Terex’s MHPS segment, a deal which in one stroke nearly doubled revenue, complemented the product offering and expanded the installed v base of cranes significantly. SEB played a key role in developing the financing solution. "SEB has since 1994 been one of our few strategic banking partners," says Chief Financial Officer Teo Ottola.

Konecranes is a world-leading group of lifting businesses, and serves a broad range of customers including manufacturing and process industries, shipyards, ports and terminals. The company, which is listed on the Helsinki Stock Exchange, has its headquarters and a major manufacturing facility in Hyvinkää, 60 kilometres north of Helsinki.

The company was formed in 1994 through a buy-out from elevator and escalator maker Kone Corporation, which has its historical base and a sprawling industrial plant on the neighbouring site in Hyvinkää.

Since its inception as a standalone company in the 1990s, Konecranes has expanded, including through numerous international acquisitions. The company currently, after the Terex MHPS transaction, has 18,000 employees in more than 600 locations in 50 countries.

The deal, which was announced in 2016 and completed on 4 January 2017, represents a major step for Konecranes. The company had revenue of over two billion euros in 2015, while Terex MHPS revenue amounted to 1.4 billion euros.

“The transaction also represents good complementary product offerings in areas such as mobile harbor cranes, straddle carriers and automated guided vehicles. In the area of industrial cranes, we get the well-known Demag brand with multiple complementary products and an installed base which is larger than Konecranes own,” says Ottola.

“The acquisition of course will provide scale in procurement and logistics, and allows us as a combined company to strengthen our research and development to maintain our competitive advantage. We land on a new strategic level. It is a transformative deal, which means we will not be the same company as before.”

SEB played a key role in the acquisition, as one of two underwriters in connection with structuring the funding package, which amounted to 1.5 billion euros.

“SEB has been a strategic partner since our inception in the mid-1990s. We have a long and extensive relationship characterised by mutual trust. SEB's contacts are easy to deal with, they act with agility and low bureaucracy and have a proactive approach,” Ottola says.

Can you give concrete examples of when SEB's advice and services create value for Konecranes?

“The greatest value is when the bank offers down-to-earth, practical advice on how we can make small improvements, for example in terms of risk management and best practices in the treasury area. It need not be grandiose solutions, but also small initiatives can be very valuable. Small solutions are often easier to accept and implement than grand plans.”