Plans land acquisitions in Germany for property development;
Aims to raise up to EUR 20m investment vehicle for German plans;
Looks to mandate advisor for capital raise.
Nordic Homes, a Latvian producer of prefabricated buildings, is interested in acquisitions of mass timber specialists in the Baltics, Chairman and CEO Kaspars Senvalds told Mergermarket (https://info.mergermarket.com/) in an interview by Agne Mazeike published on 19.02.2024.
The company, which generated FY23 sales of around EUR 12m with aim to reach sales of EUR 25m within next three years. Nordic Homes would assess opportunities to acquire smaller players specializing in glued laminated timber (glulam) and cross-laminated timber (CLT) production, Senvalds said. It is interested in companies producing up to 10,000 cubic metres per year, he added.
Nordic Homes currently uses outsourced glulam and CLT in its own production, and such acquisitions could be reviewed for vertical integration purposes, but also because Nordic Homes, and glulam and CLT companies serve similar end-customers in the same target markets, namely real estate developers.
Nordic Homes' approach towards M&A in the Baltics is opportunistic, and it is not looking to engage advisors to look for potential deals, however, it is ready to look at available targets, Senvalds said.
Fundraising plans for German expansion
Nordic Homes currently sees the biggest growth potential in Germany, where it will seek to supplement its organic growth with acquisitions of land plots with building permits for residential, social or hotel construction; or insolvent real estate developers with such land portfolios, Senvalds said.
The company targets an up to EUR 20m vehicle size at its first closing, Senvalds said, without discussing its longer-term fundraising plans. The company would like to raise the capital and start deploying it this year, he said. It will look for investors such as family offices and investors with longer-term holding periods, he said, adding that depending on investors' preferences, it could consider establishing an evergreen vehicle.
Nordic Homes estimates building up to 30,000 square metres of property in Germany within the next three to five years, using the raised capital and debt funding, Senvalds said, adding that its plans will also depend on land acquisitions. The company sees an opportunity to deliver housing projects in Germany on good profit margins using its Latvian production facility.
Read full interview here:
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