Sorainen advised Livonia Partners and its portfolio company Ha Serv on a merger with another leading wood manufacturing company, Thermory. The merger agreement was signed on 27 July 2018 and the transaction was completed at the end of October. The merger of Thermory, the leading producer of thermally modified wood, and Ha Serv, Europe’s largest manufacturer of sauna materials and ready-made saunas, has led to the creation of a global market leader in these segments. The merged company’s multifaceted production capacity provides an excellent opportunity to reap the benefits of global trends.

Leading Estonian manufacturer of sauna materials, finished saunas and thermally modified wood, Ha Serv exported to over 34 countries. In 2017, the company acquired a Finnish company, Suomen Lämpöpuu, a specialized manufacturer of thermally modified wood products.

Thermory is the largest producer of thermally modified, environmentally responsible hardwood in the world. The merged company’s turnover is approaching 70 million euro by the end of the year.

Meelis Kajandu, Founder of Thermory, and Kaido Veske, the merged company’s largest shareholder and founding partner of Livonia Partners, saw the benefits of the merger for years. “Two equally successful wood production companies that were once rivals now work towards a common goal. It was difficult choosing a name to continue under and we had to use outside advice.”

The effective sales teams of Thermory and Ha Serv have led to the expansion of thermally modified wood and sauna products worldwide. “We have been competitors for over 20 years. Together we can think bigger and faster develop our various business lines,” added Meelis Kajandu.

The merged company has two production units located in Estonia and one located in Finland. The company also has sawmills in Estonia and Belarus and a subsidiary in the United States. Thermory employs more than 500 people.

The aim of the merger is to create conditions for long-term growth by increasing efficiency and expanding the product portfolio and market reach. “Joining forces throughout the whole supply chain, starting from procurement of raw materials, increased production efficiency, improved investment possibilities and a more innovative product portfolio is beneficial to all stakeholders, from company staff to end customers,” says Marko Kevvai, CEO of Ha Serv. “The positive impacts of the merger should be seen already in 2019,” added Johann Sulling, CEO of Thermory.

The Sorainen team led by partner Toomas Prangli and including senior associates Juulika Aavik and Piret Lappert with associate Nele Suurmets assisted the client throughout all stages of the transaction.