Litorina is a growth oriented investor in the lower end of the mid-market that acquires and develops Nordic, primarily Swedish, companies.
Investment opportunities may arise when family businesses are faced with generational shifts, in management buyout situations, and when entrepreneurs need help to take their companies to the next level of their development. In a majority of Litorina’s transactions the incumbent owners have chosen to reinvest a part of their proceeds in parallel with Litorina. As minority shareholders they can continue to develop their companies in partnership with Litorina and participate in the future value creation.
Litorina will typically hold a majority share in the companies we invest in, with the management and Board of Directors holding significant minority interests. It is our ambition to work in partnership with the management and Board, in order to responsibly provide the best possible conditions for future profitable growth, with long-term industrial value creation as the overall vision.
Litorina invests in profitable, Nordic companies that typically have an enterprise value in the range of SEK 200-1,000 million and show potential for continued development. These companies should ideally hold a strong market position in their niche and have an identifiable organic and/or acquisition-based growth potential.
A competent management team with the capacity to realise a sustainable growth-oriented business plan is key to our success with an investment. The management team is often already in place at the time of our investment, but occasionally a new management team is recruited to run the company under Litorina’s ownership. Such recruitments are clearly communicated before we make the investment and often made in close dialogue with the seller of a company.
Litorina applies significant resources to identify and build relationships with the most interesting companies in Sweden.
We review approximately 100 Swedish companies per year and typically make 2 to 3 investments following a detailed assessment of the market, the business, the management team and the overall potential, with high involvement of our industrial network early on in the process.
We add value to portfolio companies by applying our well-established active ownership model. We work in partnership with management and the Board to develop the strategic plan, involving our network and providing industrial and financial expertise. We support portfolio companies by identifying and acquiring the resources needed to take action on the strategic plan. Examples of key activities to create value include: sales growth, expansion into new markets and segments, product development, add-on acquisitions, operational improvements, ownership incentives and governance improvements, including management of environmental, social and business integrity matters.
Litorina considers a divestment when the strategic plan has been implemented and substantial long-term value has been created. Litorina’s ownership period is usually 5-7 years and divestments are typically made through trade sales, IPOs or a sale to another financial institution.
Litorina is an active owner that acts through the Board of Directors. Our well-established model is characterised by a clear division of responsibilities between the management team, the Board of Directors and the owners of our portfolio companies.
The management team is responsible for the day-to-day operations and for the preparation and implementation of the strategic plan as adopted by the Board of Directors. We consider a strong management team to be the single most important factor for a company’s success. If a management team is incomplete at the time of Litorina’s investment, significant resources are allocated to augment and complement the management team.
A professional Board of Directors is another significant factor for a company’s success. Litorina ensures that a Board of Directors is recruited that consists of seasoned individuals with the appropriate experience, who are able to contribute to the company’s development and offer support and act as a sounding board to the management. The Board of Directors normally includes two or three external Board Members with relevant industry experience — one of whom is appointed Chairman — and two representatives from Litorina. The Board of Directors concentrates on strategic issues and ensures that the company follows the strategic plan that has been agreed between the management and the Board of Directors. The individual Board Members also contribute to the company’s development with their industrial experience and extensive professional and personal networks. The Board work is followed-up and evaluated annually.
In addition to board meetings, we find it beneficial to work in smaller, more informal groups, and we hold regular information follow-up meetings with the Chairman and the CEO.
The management team is fully responsible for the day-to-day operations. However, in situations where Litorina has specific competence, such as in M&A and financing activities, we tend to become more heavily involved.
It is our ambition to set common objectives and create incentives for all parties involved in the development of a company. We do this by offering ownership incentives to key individuals on the Board of Directors and management team. By ensuring that all decision makers have a common ownership agenda, we create a working environment focused on value creation.
With Litorina as an owner, a management team gains access to competence, network and capital. As shareholders in the company they run, they are allowed to act with great freedom under responsibility. It is our objective to make it financially rewarding, as well as mind-broadening and stimulating, to be a part of the management team of a Litorina portfolio company.
We recognise that our decisions and portfolio companies have an impact on, and are impacted by, society and the environment.
As active owners, it is Litorina’s responsibility to manage those impacts and promote sustainable business practices. Litorina also believes that those companies which effectively manage environmental, social and governance (ESG) matters can better protect and add long-term value and achieve the best returns. It is therefore a natural part of our strategy to effectively manage ESG related risks and opportunities in our investment activity. Ultimately, we believe this will improve a company’s relationships with its key stakeholders and help it better understand future trends that can impact the business.
We aim to build on our investment approach by further integrating the consideration of ESG related risks and opportunities, in our investment decisions and active ownership practices. Therefore, Litorina has established a formal Responsible Investment framework, inspired by recognised international principles, which outlines our approach to ensure ESG matters are systematically and proactively addressed, throughout our investment process, from sourcing to exit. This means that Litorina aims to evaluate relevant and material ESG matters before an investment decision is made, and as part of our wider governance improvements, to work in partnership with management and the Board of our portfolio companies during our ownership period, to protect and add value through effective management of ESG related risks and opportunities. We have defined specific ESG objectives, inspired by international principles and standards, including the UN Global Compact principles, to help guide our portfolio companies' work with ESG matters. The aim is to ensure that these objectives are integrated into wider business planning activities and practices in each portfolio company.
We see the implementation of our Responsible Investment framework on new and existing investments as an on-going process, where we set relevant objectives, monitor and develop our approach over time.
Litorina is a signatory to the UN PRI (United Nation's Principles for Responsible Investment) and a member of the branch organisations Invest Europe and SVCA (Swedish Private Equity & Venture Capital Association) and as such, follows industry standards and recommendations published by these associations.
Litorina’s corporate culture is underpinned by the following core values, which form the foundation for our way of working.
Clarity and transparency: Litorina’s portfolio companies shall be characterised by a clear division of responsibilities and a straight and open communication.
Partnership and alignment of interest: Litorina views an investment as a partnership with the company’s management and Board. Litorina, the Board, and the management team are all owners in the company, which leads to an alignment of interests in terms of value creation and the company’s development.
Decision-making: to ensure that decisions can be taken within appropriate time frames and to ensure that all corporate functions are populated by competent decision makers.
Proactivity: we shall strive to keep one step ahead, and always act and plan well in advance.
Trust: we shall work in close co-operation with our partners and gain their trust through participation and openness.
Development: to focus on continous development, improvement and refinement of our internal and external processes.
Responsibility: we shall uphold high standards of business conduct, act with honesty and integrity and pursue continuous improvement in all business practices.
Litorina has access to a large network of industrial advisers with significant operational experience from large and mid-sized Swedish and international companies. Litorina's industrial advisers contribute with their competence and network, often in the role of Chairman or as a board member in one of Litorina's portfolio companies. The list below contains a representative selection of the advisers we work with:
|Johan Berg||Ex. CEO Aditro, Ex. CEO Intentia||ICT|
|Per-Inge Birgersson||Ex. CEO Xylem||Industry|
|Per Borgvall||Ex. CEO Gunnebo, Ex. CEO Fagerhult||Industry|
|Bo Dankis||Ex. CEO Perstorp, Ex. CEO Assa Abloy||Industry|
|Hans Davidson||Ex. CEO Eton||Consumer|
|Magnus Dimert||Ex. CEO Adlibris||ICT|
|Anders Grönlund||Ex. CEO Kwintet||Trade|
|Torbjörn Gunnarsson||Ex. Chairman Fortnox, Ex. Chairman Mio||Services / Finance|
|Andreas Göthberg||CEO Akademikliniken, Ex. CEO SATS, Ex. CEO Memira||Services|
|Mathias Hedlund||CEO Etraveli||Consumer|
|Mikael Hellberg||Ex. CEO Pripps, Ex. CEO Alcro Beckers, Ex. CEO Wasa||Consumer goods|
|Lena Hofsberger||Ex. CEO SSP, Ex. CEO Aleris||Services|
|Henrik Höjsgaard||Ex. CEO Proffice||Services|
|Stefan Jarbratt||Ex. CEO Pelly||Consumer|
|Jörgen Johansson||Ex. Chairman Menigo, Ex. Chairman Actic, Ex. Chairman Lagkagehuset||Trade|
|Jesper Kärrbrink||COO Mr Green, Ex. CEO Euroflorist, Ex. CEO Svenska Spel||Services|
|Göran Lindö||CEO Eco Online, Ex. Head of online Dustin||Industry|
|Fabian Månsson||Ex. CEO H&M, Ex. CEO Eddie Bauer, co-founder Wrapp||Consumer Goods|
|Ulf Mattsson||Ex. CEO Tarkett Domco, Ex. CEO Capio||Services|
|Sören Mellstig||Ex. CEO Gambro||Industry|
|Mattias Miksche||Founder and CEO Stardoll||Consumer goods|
|Lars Murman||Ex. CEO Manpower||Services|
|Ingvar Nilsson||Ex. CEO Schenker and Schenker North||Services|
|Göran Näsholm||Ex. CEO Ahlsell||Trade|
|Per-Ingemar Persson||Ex. CEO Veidekke Sweden and Denmark||Industry|
|Åke Plyhm||Ex. Senior VP TietoEnator||ICT|
|Peder Ramel||CEO 3 Scandinavia||ICT|
|Tomas Ringdahl||Ex. Ceo Skanska, Ex. CEO LB Hus||Industry|
|Johan Röhss||Ex. CEO Ica, Bilia and Duka||Consumer|
|Per Sandberg||Ex. CEO Fazer Sweden||Consumer goods|
|Åke Stråberg||Ex. CEO Q-Matic, Ex.Senior VP Husqvarna||Industry|
|Thomas Thomsen||Ex. SVP at Reckitt Benckiser, VD Johnson & Johnson Consumer||Consumer goods|
|Lars Wollung||Ex. CEO Intrum Justitia, Ex. Ceo Acando||ICT / Finance|
|Magnus Yngen||Ex. CEO Camfil, Ex. CEO Husqvarna||Industry|