INTERVIEW: Investor CEO Sees Investment Operations As Crisis Eases
April 15 2009 - 12:06PM
Dow Jones News
An easing of the global economic free-fall has opened up
extraordinary investment opportunities for those ready to take
advantage, the top executive at Investor AB (INVE-B.SK) said
Wednesday.
With valuations looking increasingly cheap, business sentiment
stabilizing and long-term debt markets opening up for high-quality
companies, the Nordic region's largest investment firm said it sees
scope for add-on acquisitions, both of its own and for its core
holdings.
"The current environment will provide investment opportunities
for us, clearly, but it will also provide investment opportunities
for our companies and we hope that they will be able to take
advantage of that also," Chief Executive Boerje Ekholm told Dow
Jones Newswires.
Investor, the main investment vehicle of Sweden's Wallenberg
family, owns major stakes in some of Sweden's largest industrial,
financial and telecommunications companies, including Atlas Copco
AB (ATCO-A.SK), Electrolux AB (ELUX-B.SK), Husqvarna AB
(HUSQ-B.SK), L.M. Ericsson Telephone Co. (ERIC) and Skandinaviska
Enskilda Banken AB (SEB-A.SK).
Ekholm said add-on acquisitions provide opportunities to
minimize risk and maximize synergies and tend to be good
investments during a slowdown.
He added that merger-and-acquisition transactions, although few
at the moment, should start to pick up this year.
"I think all of our companies are in a pretty good position to
take advantage of tuck-on acquisitions, but today there are very
few sellers," he said.
Investor helped recapitalize both SEB and Husqvarna in their
SEK15 billion ($1.83 billion) and SEK3 billion ($365.7 million)
respective rights issues this year. And while Ekholm said all of
Investor's core holdings are now well-capitalized, the firm
wouldn't rule out participating in capital raisings for other
Nordic companies.
"We are not through the cycle of capital raisings yet," Ekholm
said. Participating in others' rights issues "could be an
interesting way for us to get an ownership position."
He added that Investor will only buy into firms in which it can
become an active owner with influence.
The company acquired 23% of the capital in biopharmaceutical
firm Biovitrum AB (BVT.SK) for SEK595 million in the first quarter,
and Ekholm said Investor is interested in similar deals - that is
buying well-managed companies with a strong market position and a
strong product pipeline.
"Biovitrum has a very interesting platform for growth through
both in-licensing and own-product pipeline," he said. "It is
associated with risk but also has a lot of upside if you get it
right."
Investor earlier Wednesday said its per-share net asset value
dipped 4% quarter-on-quarter to SEK144 from SEK150 as of Dec. 31,
as equity markets remained weak and its net cash position shrank
following dividend payouts and rights issue investments.
Shares have fallen 13% in the past 12 months, outperforming the
index of the Nordic region's 40 largest companies, which has lost
42%. At 1525 GMT, shares were down SEK0.75, or 0.6%, at SEK115.25,
valuing the company at $10.89 billion.
Company Web site: http://www.investorab.se
-By Anna Molin; Dow Jones Newswires; +46 8 545 130 91;
anna.molin@dowjones.com