Midinvest exits Tikomet



28 June 2013

Midinvest exits TIKOMET

Funds managed by Midinvest and other owners of Tikomet Oy have sold all shares in the company to the Finnish private equity investor Sponsor Capital and the management team of Tikomet. The transaction creates a strong basis for Tikomet to make new growth investments and continue its successful expansion.

Tikomet Oy is the leading producer of zinc reclaimed WC-Co powders in Europe with turnover of 17.3 million euros in 2012. Tikomet has rapidly grown into a significant player in the hardmetal recycling market after the investment in a new plant in Jyväskylä, Finland during 2006-2008. The company expects its strong growth to continue also in the years to come.

The foundation for the production of zinc reclaimed WC-Co powders was laid in the mid-1990s when the company started producing powders for use in the tire stud market. Since then the business has significantly expanded through the development of new markets outside the traditional tire stud market. Today, Tikomet is a highly international Finnish company:most of the raw materials used are imported from all over the world and over 80% of the production is exported. The current customer base of Tikomet includes a large number of leading global hardmetal producers in addition to the traditional tire stud producers.

The zinc process employed by Tikomet in its production is the most cost efficient and environmentally friendly process for the recycling of hardmetal. Several key elements of the technology used by Tikomet today have been developed and built in-house by the company. The use of zinc reclaimed WC-Co powders makes it possible for hardmetal producers to achieve significant savings in raw material costs which is one of the reasons for their growing popularity. Tikomet has started an investment program to increase its production capacity by 50% as the company expects continued strong demand for its products.

"This transaction greatly increases the commitment of several key members of our management team to the growth strategy and long term goals of Tikomet as they will now have an equity stake in the company. The
transaction also makes it possible for Tikomet to carry out our ambitious investment program during the next few years so that in the future we will be able to better serve our customers. For our personnel the continued success of Tikomet in the recycling market is the best way to provide good jobs and career development opportunities" comments Tikomet managing director Dr. Matti Kurkela.

"The transaction creates an excellent basis for Tikomet to continue its impressive growth and strengthens the company’s ability to respond to new business opportunities in the market. The hardmetal recycling market is in an interesting stage of development: the recycling ratio continues to increase and the zinc process is gaining more and more popularity as a recycling option. We believe that this ownership change and the investments
made possible by it will further strengthen the position of Tikomet as the market and technology leader in Europe" says Mr. Ari Jokelainen, Partner at Sponsor Capital.

"During the Midinvest ownership, Tikomet has successfully grown to become the leader in hardmetal recycling by the zinc process in Europe. This growth has been possible thanks to the farsighted factory investment project during 2006-2008 and the successful process and product development work of the recent years. This transaction enables Tikomet to enter the next phase in its growth strategy and to continue its success story" says Mr. Veli-Matti Helenius, Senior Adviser at Midinvest Management.

For further information:

Veli-Matti Helenius, Senior Advisor, Midinvest Management Oy, tel. +358 40 864 1281,

Matti Kurkela, Managing Director, Tikomet Oy, tel. +358 40 541 3701,

Ari Jokelainen, Partner, Sponsor Capital Oy, tel. +358 50 590 6750,

Tikomet Oy is a company specializing in the recycling of hardmetal by the zinc process. The company is the market and technology leader in production of zinc reclaimed WC-Co powders and operates a state of the art recycling facility in Jyväskylä in central Finland. The turnover of Tikomet amounted to 17.3 million euros in 2012. A dedicated team of 38 employees are currently employed by the company, which exports over 80% of its production.

Midinvest Management Oy is a private equity investor specialised in growth funding and ownership arrangements of small and medium-sized enterprises. Midinvest Management manages an investment capital totalling 70 million euros, and its investors are Finnish institutional investors. Midinvest currently has approximately 20 portfolio companies.

Sponsor Capital Oy is a Finnish private equity firm founded in 1997. The firm makes mainly majority investments in Finnish mid-sized companies that have an excellent management, stable market position and predictable cash flow. Sponsor Capital operates responsibly and long term as well as in a strongly profit-oriented mode and believing in management’s entrepreneurial spirit. Large Finnish institutions invest their capital through Sponsor Capital.