Information on the Target

Forestoil Oy, a manufacturer of recycled-based lubricants, joined the Fluo Group in a corporate restructuring completed in January 2025. This merger enhances Fluon’s offering of products made from recycled raw materials, expanding from plastic products to lubricants. Forestoil specializes in producing environmentally friendly lubricants tailored for the forestry industry, providing companies with efficient solutions for repurposing waste oils.

The company has established a comprehensive collection system across Finland for used clear lubricating oils, which are then reprocessed into lubricants at its production facility located in Vöyri. As stated by Petri Aaltonen, the CEO of the Fluo Group, Forestoil is an excellent complement to Fluon’s existing services, sharing the common goal of facilitating the processing of used materials into new recycled products while also creating a significant positive environmental impact.

Industry Overview in Finland

The recycling and circular economy sector in Finland has experienced rapid growth in recent years, driven by increasing awareness of environmental sustainability and the need to reduce waste. Companies in this industry are focusing on creating solutions that enable the efficient use of resources while minimizing ecological footprints. The robust infrastructure and regulatory support for recycling activities in Finland facilitate industry advancements.

The Finnish government has set ambitious targets for waste reduction and increased recycling, pushing businesses to adapt and innovate in their operations. As a result, the demand for sustainable products and materials is rising, encouraging both established and emerging players in the market to expand their capabilities and service offerings.

This heightened demand is particularly evident in sectors such as the forestry industry, where lubricants play a crucial role in operations. With the increasing emphasis on using environmentally friendly products, companies like Forestoil that provide green alternatives are well-positioned for growth as they align with the national objective of promoting sustainability.

The combined efforts of various stakeholders within the industry are contributing to a circular economy that benefits both businesses and the environment. This transformation is characterized by continuous innovation, strategic partnerships, and the sharing of best practices to enhance operational efficiencies and reduce waste.

The Rationale Behind the Deal

The merger between Forestoil and Fluo Group aims to leverage each company's strengths and expertise to create a synergetic effect that benefits both parties. By integrating Forestoil’s reprocessing capabilities and established collection networks with Fluo’s expansive service range, the combined entity can significantly enhance its operational efficiency and market reach.

This strategic partnership is also expected to expand product offerings, allowing the Fluo Group to better cater to the increasing demand for sustainable lubricants. By streamlining operations and optimizing resource utilization, the deal is designed to drive growth and contribute positively to the environmental goals of both companies.

Information About the Investor

The Fluo Group, originating from Kokkola, has swiftly expanded its range of services and established a prominent position within the circular economy landscape in Finland. The conglomerate consists of various business units dedicated to a wide array of recycling services, including the transformation of collected materials into reusable raw materials and new products.

In 2024, the total revenue for the merged entities was approximately €35 million, with nearly 140 professionals in the circular economy sector employed within the organization. Fluo's commitment to local partnerships and sustainable practices underscores its mission to provide 100% local service on a national scale, distinguishing it from competitors in the market.

View of Dealert

In assessing the merger between Forestoil and Fluo Group, it appears to be a strategic and sound investment for both parties. By combining their resources and expertise, they are positioned to capture a significant share of Finland’s growing demand for sustainable lubricants. The alignment of their operational goals enhances the potential for increased profitability while also fostering advancements in environmental stewardship.

The establishment of a larger operational infrastructure and the sharing of best practices can lead to improved efficiencies and cost savings, which are critical for surviving in a competitive market. Moreover, the innovative capabilities introduced through this merger could result in new product developments that adhere to evolving consumer preferences and regulatory standards.

Furthermore, this consolidation is timely given the momentum behind Finland’s sustainability agenda, suggesting that the combined entity could play a significant role in shaping the industry’s future. With increased government support for recycling initiatives, the merged organization is poised to take advantage of favorable market conditions.

Overall, the merger stands to provide lasting benefits for both the Fluo Group and Forestoil, positioning them as leaders in the circular economy sector while contributing to a more sustainable future.

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