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Selling your company: “It’s all about trust”

In 2014 Jussi Rantanen and his co-owners sold their company to Procuritas. He says that the private equity firm has kept its promises.

Founded in 2002, Fidelix is a pioneer in smart buildings and indoor climate control.

“Smart building automation is a kind of building welfare technology. When the building is doing well, people are comfortable too,” Jussi Rantanen explains.

The company was founded in Finland almost 20 years ago. In 2014 it became a Procuritas company – enabling an acceleration in the development of the company and taking the business to the next level.

“We were focused on the day to day activities. It was not obvious for us to close a deal, but after five months with due diligence, we were not in doubt. We learned a lot about Procuritas and their people as well as discovering further commercial opportunities for the company,” he says.

Trust is a keyword

During the sales process, Procuritas was able to demonstrate significant insight and knowledge of Fidelix’s business and what potential it had.

“They put a lot of effort into understanding the company and did their homework thoroughly. They made clear what we could accomplish together. We were impressed and Procuritas certainly earned our trust,” says Rantanen.

And trust is a keyword, according to Rantanen. As part of the deal, the Finnish entrepreneur reinvested in the company.

“Trust is the name of the game and it goes both ways. If there is no atmosphere of trust, it will be difficult to continue together. We had to prove our will and ability to continue to grow the company and run the business after the transaction,” he says.

The right setup

Rantanen explains how the organization has become more capable of achieving the company’s growth ambitions.

“As an entrepreneur, you have to run fast, but you also want to keep control of the company yourself. It is not necessarily the right thing to do,” Rantanen says.

One of Fidelix’s biggest challenges has always been to attract talented and highly competent people. In 2017 Rantanen stepped down as CEO, leaving the management to Tero Kosunen.

“We had to build a new company structure and needed a different kind of leadership. Thanks to Procuritas we got the right setup and an excellent managing director bringing valuable experience from running bigger companies,” he says.

Gaining a competitive position through M&A

Acquisitions have and are an essential part of Fidelix’s strategy to enable further growth. With both capital and their financial insight, Procuritas has contributed to that happening.

“They have been supportive in following our growth plan and have helped us succeed with our M&A activity,” Rantanen says.

In 2018, Fidelix acquired Larmia Control AB, a Swedish technology company providing building automation and surveillance systems. And in 2019, EcoGuard AB, a market-leading Swedish provider of cloud-based software, sensor products, and innovative solutions for residential building owners, also joined the Fidelix Group. Also, in 2019, Fidelix acquired 40 percent of the shares of Lansen Systems AB, the leader in developing smart metering solutions technology.

“Procuritas have kept their promises to create and grow the business. With these acquisitions Fidelix has strengthened its competitive position in the market,” he says.

What is the advice for other entrepreneurs?

Entrepreneurs may think selling their business to a private equity group involves considerable risk. When asked what advice he would give to entrepreneurs, Rantanen states that it is probably a beneficial move to include a professional owner.

“If the timing feels right, you want to grow the business and the offer is reasonable, go for it. Make sure you feel trust in the buyer, reinvest some of your money, and continue to work. You will be in a better position to develop the company, the risk is reduced, you earn a decent salary and still have ownership”, Rantanen says.

Aiming for double turnover in five years

With the latest acquisitions, the Fidelix Group now employs more than 300 people with net sales of more than 40 million EUR.

“The digitalization of buildings in the European market will continue to grow as EU’s energy efficiency requirements are implemented, more data becomes available and automation is wanted,” he says.

Fidelix’’s main market is in Sweden and Finland, but they work with an extended network of partners all around the globe. The company aims to double its turnover by 2025 and grow the employee base further.

“We have the right setup and a powerful team, but we have to work hard. This will not come for free,” Rantanen concludes.

 

Related information

“Creating the market leader of smart buildings” by Fidelix

The Fidelix investment