Kramp merges with Danish peer Grene
Wholesaler has more to offer customers in 22 countries in Europe
Kramp and Grene, two of Europe’s largest technical wholesalers of parts and services for the agricultural industry, are to join forces. The two companies complement each other not only in terms of product range but also 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 managements of both companies are confident that bringing the two companies together will generate significant synergy effects. The services that Kramp and Grene provide for their customers are organised in each country and this will continue to be the case.
During the past 10 years Kramp has transformed 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 markets, Baltics and Poland. The two companies have been working together in a joint venture in Russia for several years. The almost 2,400 people employed by the wholesalers 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 Southeast European markets targeting revenues 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 innight distribution to our customers. We want to increase this lead in order to provide the best local service. That way we will be able to keep our company strong and profitable.”
The technical wholesalers have always located close to their customers. Sales and service are organised regionally in the language and style of the country. All that will change is that customers in these countries will be offered a wider range of parts and accessories. And the product range will expand considerably over the next few years.
A synergy team led by Carsten Thygesen, CEO of Grene, will immediately begin working on the development of synergies. “We will be focusing primarily on product range expansion and purchasing. Apart from an improved product range our customers won’t notice the integration. The delivery of an average of nearly 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.
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