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3i and CapMan sell Karelia Corporation to the Hartwall family

Private equity companies 3i and CapMan are selling their 53 % stake in Karelia Corporation to the Hartwall family and Hartwall Capital Oy Ab. The net value of the company is about EUR 115 million at the time of the transaction.

Post the acquisition, the Hartwall family will own approximately 64% of Karelia. Heikki Väänänen, the founder of Karelia Corporation, is slightly increasing his stake to 33.5 %. He will continue as Karelia''s Chairman. Management owns 3 % of the company.

The acquisition will not have any effect on personnel or the operations of the company. The transaction requires the approval of the Estonian Competition Authority and is expected to be closed by the end of 2004.

Karelia is the third biggest flooring manufacturer in Europe. Karelia is the only Finnish vinyl manufacturer and produces wood and vinyl floorings.. The Karelia Corporation comprises the parent company Karelia Corporation and its wholly-owned subsidiaries FinnWoodFloors Oy (FWF) and Upofloor Oy.

Hannu Isohaaro, Director at 3i comments: " Karelia Corporation was established in 2000, following the merger of Oy Karelia Parketti Ltd and Upofloor Oy by ourselves and Heikki Väänänen . Since our initial investment, the company''s investments have totalled over EUR 36 million with the biggest being at Karelia Corporation''s factory in Kuopio, and the company''s turnover has increased by EUR 30 million to a total of EUR 115 million."

Tuomo Raasio, Senior Partner at CapMan says: "Karelia Corporation has been a profitable and interesting investment and the company has a very promising future. We are very pleased that the ownership will remain in Finland and that the Hartwall family will continue to support the long-term development of Karelia Corporation."

Hartwall Capital and Heikki Väänänen have decided to develop Karelia''s operations over the long-term. Heikki Väänänen, Chairman of Karelia Corporation, comments: "Karelia Corporation has all the prerequisites to further grow in a stable market as well as enter new and developing export markets in the flooring business."

Erik Hartwall, Chairman of Hartwall, says: "The Hartwall family''s brewery ownership has changed into a minority shareholding of a large international brewery company. To continue our 200 years of industrial experience, the family is looking to invest in interesting Finnish export companies. In Karelia Corporation we saw a very promising company which has top class Finnish products and know-how. Karelia Corporation also has very good growth potential in international markets." 

Notes to editors


3i is a world leader in private equity and venture capital. We focus on buyouts, growth capital and venture capital and invest across Europe, in the United States and in Asia Pacific.  Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.

In the 6 months to 30 September 2004, 3i invested £521 million, including co-investment funds. 3i''s buyout business concentrates on the mid and smaller buyout markets in Europe and Asia Pacific and invested £305m in the 6 months to 30 September 2004.  Our growth capital business invested £142 million in the 6 months to 30 September 2004 in high growth companies expanding organically or through acquisition. 3i''s venture capital business invested £74m in the 6 months to 30 September 2004 in early stage technology companies.

CapMan Group

CapMan is one of the leading private equity investors in the Nordic countries and specialises in mid-sized buyouts in various industry sectors, technology investments in the IT and telecommunications sectors and investments in life science companies. The CapMan team comprises around 80 people in Helsinki, Stockholm, Copenhagen and Oslo. CapMan manages/advises Nordic funds with approx. EUR 1.2 billion in total capital. To date, the funds managed by CapMan have invested in 146 companies in the Nordic countries and exited from 66 companies. The latest investments are made in Finnish Tokmanni Oy, Swedish Gammadata AB, Norwegian Locus AS and Danish Anhydro Group. CapMan Plc is listed on the Main List of the Helsinki Stock Exchange.

Karelia Corporation

Karelia Corporation is one of the leading manufacturers in Europe. In 2003, the group reached a turnover of €107,5 million and had approximately 665 employees. The group has seven production units and sales office in Estonia. The main markets of the Karelia Corporation are Finland, Western-Europe, Northern America and Russia. Karelia Parketti began in 1981 when it focused on installation, importation and wholesaling of hardwood floorings. In 1992, the company launched its hardwood floor production under the brand name Karelia in Tuupovaara, and in 1998 another factory was opened in Kuopio. The production units of the company are located in Kuopio and Tuupovaara. Sales and administration are in Kuopio.

Hartwall Capital Oy Ab

Hartwall Capital Oy Ab is an investor owned by Hartwall family. Its biggest investment is in British brewery Scottish & Newcastle PLC. Hartwall Capital Oy Ab is the biggest owner of Scottish & Newcastle PLC.

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