21.08.2017

Cramo quits Latvia and Kaliningrad

Finnish international rental company Cramo completed the sale of its rental businesses in Latvia and Kaliningrad - SIA Cramo and Cramo Kaliningrad to Storent in an all share deal.

The two companies ae loss making, but generated revenues of $6.3 million last year and operate from seven locations with 43 employees. The deal is worth €1.8 million to Cramo. Storent was established in 20087 by Andris Bisnieks, Andris Pavlovs, Girts Putnins and Inga Jolkina left Ramirent Latvia to set up in opposition. The company now operates from 21 locations in Latvia, Lithuania and Estonia, Sweden and Finland – following its acquisition of Leinolift in 2016. Darby Private Equity has owned a controlling interest in the company since 2014.

Cramo chief executive Leif Gustafsson said: “The decision to divest our operations in Latvia and Kaliningrad is in line with Cramo’s new strategy Shape and Share, aiming towards a leading position in all Cramo markets. Our performance in Latvia and Kaliningrad has not met our high expectations in terms of return on investment and profitability. We want to focus our investments in markets where we estimate to receive the highest returns in the long term.”

Vertikal Comment

An interesting move from Cramo which seems to be pulling back from being a full service international general rental company. In July is sold its Danish rental business and not this. If it continues it is likely that the company will gradually morph into a specialist rental business centred around cabins/modular space.

Storent has made fantastic progress in the space of 10 years or so, initially is showed how in smaller countries a well financed, well run locally owned rental business can see off multinational interlopers. However now owned by a private equity owned business that is expanding overseas it is quickly becoming something entirely different. It will be interesting to see how its domestic market share fares as it grows elsewhere.