Storskogen Set for Growth with Renewed Acquisition Strategy
Storskogen aims for growth through a focused acquisition strategy after significant operational improvements and debt reduction.
Key Points
- • Storskogen is set to return to growth with a renewed focus on small to medium-sized acquisitions.
- • CEO Christer Hansson highlights operational improvements as key to pursuing acquisitions again.
- • The company reduced its portfolio from over 130 to 112 businesses amid restructuring efforts.
- • Storskogen has cut its debt by approximately 4 billion SEK, enabling future acquisitions.
Storskogen, a major Swedish investment group, is poised to return to a growth trajectory following a concentrated effort on operational improvements and significant debt reduction. Chief Executive Officer (CEO) Christer Hansson emphasized the company's renewed focus on acquisitions after a critical restructuring phase. Currently, Storskogen operates 112 companies, a decrease from over 130 at its peak, reflecting a strategic divestment of non-profitable units.
The company faced steep challenges after its stock plummeted from over 60 SEK in December 2021 to just around 6 SEK by February 2024. This decline prompted a reevaluation of its operational strategy. Hansson, who succeeded co-founder Daniel Kaplan, noted that the transition from a low-interest environment necessitated a revised acquisition strategy, now focusing specifically on small to medium-sized enterprises with profits ranging between 20 and 50 million SEK.
Storskogen's strategic shift has identified five key investment themes: Health, Infrastructure, Energy & Sustainability, Automation, and Digitalization, which align across its business sectors of Industry, Services, and Trade. Despite the company's fluctuating stock performance, it has managed to maintain stable profit and cash flow levels, reportedly generating approximately 3 billion SEK annually while trimming approximately 4 billion SEK in debt.
In June 2024, Storskogen executed a significant restructuring plan, divesting nine business units that collectively suffered an adjusted EBITA loss of 98 million SEK but generated 1.6 billion SEK in revenue. This move was part of a broader strategy aimed at refocusing on more resilient business segments. Moreover, the company has secured its financial footing by removing substantial debt maturities from its immediate outlook until late 2027.
Looking forward, Storskogen plans to diversify its geographical exposure beyond Sweden, where currently 46% of its revenue is sourced. Recent acquisitions include a healthcare document provider in Switzerland and a logistics firm in the UK. Despite these positive developments, Hansson acknowledged that the stock market has yet to align with the company’s operational recovery and acquisition efforts, leaving room for optimism about future performance.