Yesterday, state enterprise Eesti Energia announced sales of its subsidiary – power grid constructor Eesti Energia Võrguehitus – to German family firm Leonhard Weiss for €7m.
Eesti Energia sells subsidiary
27th June 2014, 14:00
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«For Eesti Energia, dedicated to develop oil shale industry, it is expedient to drop side activities,» commented CEO Sandor Liive.
«Võrguehitus, in its turn, needs an owner whose main focus is designing and constructing of grids. Having managed to find such an owner, we hope Võrguehitus stands a good chance to succeed.»
According to Eesti Energia, 83 strategic and financial investors active in the Baltics and the Nordics were addressed by advisors to sales process; of these, the offer by Leonhard Weiss proved the best.
Heino Harak, owner and manager of KH Energia-Konsult, a leading private owned electrical works firm in Estonia, said they were proposed to participate but declined.
«We had, prior to that, arrived at the conclusion not to buy. The future did not look as bright as we’d have wished,» he explained.
«We did not think there were enough binding contracts; also, we had to consider lack of own production bases and other issues. There are enough players on that market and there are not contracts enough to secure work. At that, Võrguehitus has quite a number of people on its payroll,» he added.
Last year, Võrguehitus averaged 269 employees with average wages of €1,446 – a bit higher that Eesti Energia average of €1,379 a month. As at end of last year, Eesti Energia employed a staff of 7,000.
When it comes to the price for Võrguehitus, Mr Harak said it was not high. «A while ago, much more would have been paid for the company,» said he and added that considering the number of employees Võrguehitus’ price was very low.
The company’s last year profit was €1.3m, the transaction price and profit ratio thus being 6 i.e. to the tune of the listed construction company Nordecon.
Võrguehitus’ last year sales amounted to €22m. Of that, €20m was earned inside Eesti Energia, and €2m outside of it.
The new owner of Võrguehitus will be Leonhard Weiss’ subsidiary Leonhard Weiss Baltic Holding OÜ which, starting 2011, has been involved in railway construction and maintenance in Estonia and provides various building services in Germany as well. Leonhard Weiss Viater Ehitus, a subsidiary of the latter, last year did a €4m turnover; the turnover of Leonhard Weiss RTE was €13m. Thus, Võrguehitus – to be called Leonhard Weiss Energy AS – will increase the group’s turnover in Estonia more than twice.
German family firm Leonhard Weiss was established in 1900. The group employs 3,833 people, 250 of these in Estonia.