In 2016, Livonia Partners (one of the leading PE funds in the Baltics) made their first acquisition of Estonian company Ha Serv, which already at that time was a noticeable player in sauna and thermally modified wood segment in Europe having around 200 FTEs and EUR 20m turnover. Ha Serv was a perfect candidate for international expansion having good and optimized processes, strong corporate culture, as well as professional and result-oriented management team ready to accept challenges and ambitious growth targets.
Immediately after the purchase, CIVITTA helped Livonia Partners and Ha Serv to assess the global sauna and thermally modified wood markets. Taking into account that no credible data was available on these segments due to their niche nature, CIVITTA team had to gather all the data from scratch, build product and distribution segmentation, as well as conduct 50+ expert interviews across the world to understand the market and its specifics. By using multiple approaches to gather and validate market statistics (data from manufacturers, distributors, relevant associations, experts, etc.), CIVITTA team provided a thorough analysis of the market and identified the most attractive segments in terms of market size, growth and profitability.
Detailed market analytics helped the company to rethink their strategy and focus on ambitious growth and expansion targets in segments with the highest potential (relatively large segments with good profit margins). Together with the management of Ha Serv and Livonia Partners the team formed a strategy for the next couple of years, which focused both on organic growth and mergers in the region. Besides the strategy the team prepared a roadmap with strategic initiatives, clearly assigned responsible managers, deadlines and KPIs. This helped the management of Ha Serv and Livonia Partners to have one common vision on future targets and key initiatives needed to achieve them.
In line with its strategy to strengthen leadership in the global arena in 2017 Livonia Partners acquired a Finnish company focused on thermally modified wood and painted products Suomen Lämpöpuu. The company had a similar product line to Ha Serv and many other synergies, therefore right after the acquisition both companies were merged. CIVITTA helped Ha Serv and Suomen Lämpöpuu to relook their sales processes, define synergies and create a unified sales team and procedures to maximize upsell potential and drive sales in new segments.
In 2018 Livonia Partners made another merger in line with its strategy to build a global leader in sauna and thermally modified wood. This time CIVITTA team was invited to facilitate the post-merger integration process and lead strategic synergy planning for Ha Serv and Thermory. As both companies were of substantial size (around EUR 65m turnover jointly and around 500 employees) post-merger planning was quite sophisticated and required a lot of involvement from both management teams, as well as Livonia Partners management. Decision was made to separate synergy planning into 4 key workgroups: sales, procurement, production and admin. After strategic synergies were identified and a 1-year detailed post-merger integration plan was formed it was presented by workgroup leaders and approved by top management and shareholders. After the strategy was accepted by the board, CIVITTA helped a joint company to set up the PMO process for continuous monitoring of the implementation of initiatives.
Being challengers and believing in the idea to build the global company together with detailed analytics and strategic planning has led the company to become the global leader in sauna and thermally modified wood. Today the joint company under the brand name “Thermory” has more than EUR 100m turnover and more than 700 employees. As Kaido Veske, Founding Partner at Livonia Partners, said: “We started with one single facility in Tartu and ended with 8 facilities, 2 warehouses and 2 sawmills across the globe”.
On behalf of CIVITTA team that has been assisting Livonia Partners, Thermory, Ha Serv and Suomen Lämpöpuu on their way to building the global leader in the thermally modified and sauna wood segment, we would like to congratulate Livonia Partners on the successful sale of the majority stake in Thermory to UG Investeeringud.
Board Member, Associate Partner