Finnish Lapin Kumi and Swedish Colmec, two independent tire services companies in Northern Europe, are combining their businesses to launch a new sustainable and customer centric tire services group. This step follows Centrala Gummi’s, a leading Swedish tire service provider, and Colmec’s announcement to combine earlier in the spring.
The new group will be built on two corner stones: circularity and customer-focus:
- Firstly, the new group intends to build a circular tire service offering that will support the full tire life cycle – from selling new tires, to swapping & servicing tires, to extending their life with retreading and then ultimately recycling end-of-life tires that can no longer be used. This way reducing the tire industry’s massive waste generation, production emissions and prolonging the use of existing tires
- Secondly, the new group intends to build a more service-minded and customer-centric alternative to other industry actors. Lapin Kumi and Colmec both draw upon exceptional customer satisfaction and strong local relations. The joint group can now better serve customers with better coverage. The group will also invest heavily in digitization and more convenient customer experience
Following this transaction, the new group’s operations in Finland will be centered around Lapin Kumi, while Colmec represent the group in Sweden, Norway and Poland. The combined group is expected to reach a turnover of EUR 250m and 700 FTEs by year end 2024. The transaction is backed by leading Nordic private equity firm Norvestor. Following the transaction Norvestor will remain as the majority shareholder in the group, followed by the management and key employees of Lapin Kumi and Colmec.
“Lapin Kumi has grown rapidly into a national player in recent years. With this transaction, we can accelerate our growth even further as a new bigger group and invest more heavily in sustainability and digitization. Norvestor has a great track record of developing and growing family businesses. They bring resources, insights, and proven operational models from various industries.”, says Ville Ruokanen, CEO of Lapin Kumi.
“The establishment of this new group is a landmark transaction to create a new more sustainable and customer-oriented player in an established industry with high emissions and varying levels of service quality. We recognized Lapin Kumi as the right partner due to its established market presence, high service quality, and potential for continuing the high pace of growth in the coming years”, says Ian Poppelman, Partner at Norvestor and Chairman of Colmec
“In the future, the new group’s growth in Finland will be centered around Lapin Kumi. The first significant change will be the integration of Colmec’s Finnish operations into Lapin Kumi. Colmec Oy, Bandaris Oy, and Pentep Oy will become subsidiaries of Lapin Kumi..”, Ville Ruokanen continues.
The transaction is expected to close in Q3 2024, subject to customary closing conditions.
Lapin Kumi is a family business founded in 1947 in Rovaniemi. The current CEO, Ville Ruokanen, represents the third generation in the business, which began with his grandfather Veikko Keskiruokanen repairing rubber boots. The company operates in 14 locations, with a separate retreading plant in Rovaniemi. Lapin Kumi employs 207 permanent staff, and during peak tire changing seasons, more than 300 are employed by the firm. Last year, the company’s revenue was €56 million. Ville Ruokanen co-owns Lapin Kumi with his uncle, Risto Keskiruokanen.
Colmec is a fast-growing OEM independent tire services provider in Sweden, Norway, Finland and Poland. Colmec is a leader in the service and distribution of truck and bus tires. The company also host a tire retreading operation. which actively help tire owners to prolong the life of their tires.
Norvestor is a leading private equity firm focusing on mid-market buyouts in the Nordic region with offices in Oslo, Stockholm, Helsinki, Copenhagen, Berlin, and Luxembourg. The team has worked together since 1991 making it one of the most experienced private equity teams in the Nordics, having executed 82 investments with more than 350 follow-on M&A transactions, in addition to executing 58 exits including 16 IPOs. The Norvestor funds seek to invest in growth companies in the Nordic mid-market that have potential to achieve a leading Nordic or international position, typically through organic growth, acquisitions across fragmented industries and by geographic expansion. www.norvestor.com
