Gomab OÜ - a company that manufactures solid wood furniture mainly for export has a new owner - Askala OÜ from Delux group. The role of Investment Agency in the transaction was to advise Gomab’s owners.
Gomab is a mid-sized furniture company with more than 200 workers and its production site is located next to the Latvian border in Valga which forms a twin city with Valka on the Latvian side. Gomab is an assignee of Valga Mööblivabrik, which was established in 1963. Gomab’s production is sold for export. Main target markets are Germany and Austria. With the transaction, Delux acquired a territory of over 50 000 square meters and about 30 000 square meters of production space. Delux is a well-known brand primarily in Scandinavia that focuses on the production and sales of beds, mattresses, blankets and pillows. Delux’es first investment to Estonia goes back to 1993 when a production site was established in Viljandi. Last year, Delux decided to expand into solid wood furniture business and acquired Askala OÜ.
„The local furniture industry has plenty of challenges despite strong economic growth in Estonia. A very low inflationary environment in Western Europe does not allow local producers to increase export prices. Labor costs are increasing rapidly at the same time, which puts pressure on margins. Local companies have to compete with companies from other parts of Eastern Europe and elsewhere where labor is cheaper. In order to stay competitive, one has to cut costs, improve efficiencies or expand. A faster alternative to organic growth is an acquisition“, a partner of Investment Agency Sulev Raik explained. „The merger of Askala and Gomab brings up synergies and economies of scale. It improves the company’s competitive outlook and opens up new opportunities”, Raik added.
Investment Agency (www.agency.ee) was founded in 1998 and focuses on advising M&A transactions, pre-sale preparations and sale of the companies. Investment Agency has advised pre-sale preparations or sales process of more than 30 companies, organized capital raisings and conducted a solid number of valuations of the companies.
Investment Agency is a member of Corporate Finance in Europe (http://www.corporatefinanceineurope.eu) network.
Sulev Raik, partner of Investment Agency
Phone: +372 556 795 75, e-mail: firstname.lastname@example.org
Illar Kaasik, managing partner of Investment Agency
Phone: +372 505 1753, e-mail: email@example.com