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  • From a local engineering office to a multi-million euro business
Article:

From a local engineering office to a multi-million euro business

13 October 2016

In just six years, Wise Group grew from a small local engineering office into a significant player on the national stage. In that time,

  • turnover has grown tenfold
  • the company’s value has grown tenfold
  • the company has grown through a combination of 22 acquisitions and organic growth.

Wise Group grew to be large one piece at a time

In 2009, Pekka Lindholm, Senior Partner at Consilium Corporate Finance (which became BDO Consilium following an acquisition in spring 2016), began to take note of large technical engineering groups, such as Pöyry, Sweco and Ramboll, acquiring small engineering offices at an accelerating rate.

He began to wonder whether the engineering industry presented opportunities for Consilium to create added value. He discussed the idea of industry consolidation in the construction sector with Erkki “Edi” Kupari, an advisor to Consilium who has worked in the industry for a long time. After long conversations and brainstorming meetings, they began to think about the possibility of taking something small and building it into something big.

The brainstorming team was joined by more of Consilium’s experts around this time. Tuomo Alamäki, another Senior Partner at Consilium, brought in his extensive expertise in financial control and financial planning. The team’s industry expertise was supplemented by Lauri Hintikka, the former CEO of Sweco, while Eero Rantala, the former CEO of Eka, complemented the team with his strong networks. This group of founders thought about their strategy: what exactly were they doing and what were they trying to achieve? Once they had a clear idea of strategy, the founders named the project Wise Group Finland and formed the Board of Directors of the newly established company. Financing for the new enterprise was acquired from equity investors as well as banks.

The company’s operations began to take concrete form when it made its first acquisition. The group of investors acquired Ylimäki & Tinkanen, an owner-managed and stable local engineering office in Kotka. One of the terms of the acquisition agreement was a significant factor for successful consolidation: the requirement for the sellers to invest 20% of the sales price back into the company. This created a strong commitment for the former owners to ensure the continuity of operations and provided all of the parties concerned with a shared goal. From now on, the business owners Rauli Ylimäki and Harri Tinkanen brought their expertise to the team.

The company quickly mastered the consolidation and acquisition process. Soon it was acquiring small businesses at a steady rate and the company expanded from the Helsinki area and Southeast Finland towards the north. Each new acquisition complemented Wise Group’s operations with its competencies, adding areas such as building services, renovation design, electrical design and HPAC expertise to the Group’s portfolio.

In 2016, less than six years after its first acquisition, Wise Group is one of the five largest companies in the construction contracting, structural design, building services design and renovation sector in Finland.  The company employs some 500 engineers and its expected turnover for the current financial year exceeds EUR 40 million. The company’s profitability has been good right from the start, and both its turnover and shareholder value have grown approximately tenfold.

-    One key factor in this strong push for growth has been that, from the early days, there has been a clear idea of what kind of company Wise Group should grow to become.  Acquisitions have been motivated by the pursuit of more diverse technical expertise, greater resources and geographical coverage rather than quick financial wins. The chosen strategy gives the acquired companies encouragement, but it also gives them space to grow and reach their targets in their own way. The fact that we do not take the companies we acquire and squeeze them all into the same mould has proved to be a very effective approach for the business as a whole and for our overall corporate culture, says Aki Puska, CEO of Wise Group.

-    The support of our background forces, namely Consilium Corporate Finance (now BDO Consilium) and our equity investor Helmet, has played a key role in the story of Wise Group’s growth, Puska adds.  


BDO supports its clients through various growth stages

Our Corporate Finance and Transactions team possesses extensive and diverse expertise. Here are some examples of our services:

  • consolidations and industry restructurings
  • disposals and acquisitions
  • due diligence
  • acquiring equity financing and other funding
  • First North IPOs
  • succession planning, increasing shareholder value
  • internationalisation
  • financial administration advisory services.