Inter Ikea buys into Nordic modular property business for €91m

Ikea Group, the Swedish home furniture retailer, has acquired a majority stake in temporary building specialist Nordic Modular Group for SEK 845 mln (€91 mln).

The acquisition of the 65% stake from Stockholm-listed property company Kungsleden values the entire Nordic Modular Group, which is to be rebranded, at SEK 1.3 bn (€140 mln).

Although Nordic Modular Group is no longer core to its business, Kungsleden will retain a 35% stake to continue 'to benefit from the company’s proceeds and growth potential'. The transaction releases SEK 700 mln, which, Kungsleden said, will give it an additional war chest of SEK 1.8 bn, assuming an LTV ratio of 60%, to acquire commercial properties in its target markets in Sweden.

The divestment will have a negative effect on the profit of around SEK 150 mln on Kungsleden's balance sheet. Kungsleden will also re-invest SEK 270 mln in the new holding company in the form of shares and a shareholder loan in return for its 35% stake.

Commenting on the deal, Kungsleden CEO Biljana Pehrsson said: 'Kungsleden has today taken yet another important step towards realising our business strategy. The main direction in Kungsleden’s new strategy is to own, manage and develop commercial properties in growth regions in Sweden. Since the new strategy was presented almost two years ago, Kungsleden’s explicit intention has been to sell Nordic Modular Group as its business is separate from the group’s core business.'

The acquisition was carried out by Inter Ikea Investments, which invests in non-listed Swedish companies on behalf of Inter Ikea, holder of the intellectual property assets and real estate of the Ikea retail group.

Henrik Jonsson, CEO of Inter IKEA Investments, said: 'We like companies with a clear direction, a strong management and good profitability. Nordic Modular Group fits this description well and we look forward to develop the company together with Kungsleden and the management team.'