KRAMP MERGER Joining forces with Danish parts specialist Grene
Kramp and Grene, two of Europe's largest agricultural wholesalers of parts and services, are to join forces.
The two companies complement each other both with the product range and geographically. Kramp and Grene together will be the market leader in many countries with revenues of 625 million euros and a presence in 22 European countries. The management of both companies are confident that there will be significant synergies generated by bringing the two companies together. The current services that Kramp and Grene provide for their customers in each country will continue.
During the past 10 years Kramp has developed into a strong e-business oriented company with a market leading one-stop-shopping concept that leads the market in the Netherlands, Germany and Belgium and has a strong position in a number of other European countries. Based on the same concept, Grene is the market leader in the Nordic, Baltics and Polish markets.
The two companies have been working together in a joint venture in Russia for several years. The combined 2,400 people employed by both businesses will not be affected by the merger. The new consortium plans to improve and strengthen existing market positions and to achieve further expansion in East and South-eastern Europe targeting revenue of around 1 billion euros by 2017.
"We operate in a fragmented market," says Eddie Perdok, CEO of Kramp. "We have gained a lead in this market not only through the scale of our operation, but also, and above all, through the quality of our service, online sales (e-business), technical support and next day distribution to our customers".
A synergy team, led by Carsten Thygesen CEO of Grene, will begin work immediately. "We will be focusing primarily on product range expansion and purchasing. Apart from an improved product range our customers will not notice the integration. The delivery of around 13.000 orders a day must not be affected in any way. This will require thorough preparation and professional execution," says Carsten Thygesen.
The merger of Kramp and Grene will be effected by means of a share swap. Grene is owned by Schouw & Co, a Denmark based holding company that invests in Danish industrial companies. Schouw will get a 20% interest in Kramp. The existing shareholders of Kramp, including the management and private equity firm NPM Capital, will retain their shares and will hold a combined 80% interest in the company created by the merger. The share swap will mean that the company's financial position remains strong with a solvency ratio of around 40% and a modest interest bearing debt..
Kramp and Grene are already well acquainted, says Eddie Perdok. "We have been working together since 1998 and we embarked on a joint venture in Russia in 2008. The management of the two companies know each other and have developed mutual respect. There will be no changes in the management of the two companies." Grene will continue to operate under the leadership of Carsten Thygesen and his existing management team.
Both companies will be directed by a new holding board consisting of Eddie Perdok (CEO) and Hans Scholten (CFO). "Hence there is no question of integration of management teams or reshuffling of roles."
The proposed merger has been submitted to the Works Councils of both companies and the Competition Authorities in Poland and Russia. The transaction is expected to be concluded before the end of the year.
