Rautakesko signs a letter of intent to acquire a Russian DIY chain
Rautakesko Ltd, a Kesko Corporation subsidiary, has signed a letter of intent to acquire a majority holding (55%) in the St. Petersburg company which owns the Stroymaster DIY store chain. The price is 8.3 million euros and the additional price tied to the results of 2005-2009 is 5.1 million euros at the maximum.
Stroymaster is one of the major DIY (Do-It-Yourself) store chains in the St. Petersburg area. Its market share is about 20% of the total sales effected through DIY chains. In 2003, the net sales of the Stroymaster chain totalled 38.6 million euros. During the first six months of 2004, its sales totalled 26.9 million euros, representing an increase of 73% on the corresponding period of the previous year. The net sales for the whole of this year are estimated to amount to about 70 million euros. The chain employs about 830 persons.
At present, the Stroymaster chain includes 4 DIY stores in the St. Petersburg city area and the fifth is being constructed. In addition, the chain is planning to establish bigger units modelled on the K-rauta concept in St. Petersburg and possibly in other parts of Russia.
Currently the Stroymaster chain is part of the St. Petersburg Teks group. The sellers are the Teks group owners Alexander Selenkin and Dmitry Skvortsov and their companies. The share transaction is planned to be effected immediately after a due diligence procedure has been completed and necessary permissions have been obtained from authorities, not later than 15 March 2005.
In 2003, Rautakesko’s net sales totalled EUR 995 million, 31.8% of which were generated from outside Finland. In Finland, Rautakesko operates a chain of 43 K-rauta stores and a chain of 102 Rautia stores and a nationwide Industrial and Constructor Sales unit. In Sweden, Rautakesko currently has 11 K-rauta stores. In Estonia and Lithuania, Rautakesko is the market leader in the hardware and builders’ supplies trade. In Latvia, Rautakesko has one K-rauta store in Riga.
Further information:
Rautakesko Ltd, Matti Halmesmäki, President, tel. +358 1053 20200
Rautakesko Ltd, Mika Koskinen, Project Director, tel. +358 50 464 7808
KESKO CORPORATION
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Erkki Heikkinen
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