Target Company Overview

The Tarkkala Group and Konne Group have officially merged to form a new entity as of April 25, 2025. This merger, which is subject to approval from competition authorities, sees Sponsor Capital joining the new organization as a shareholder. The executives of Tarkkala and Konne Group will remain significant shareholders following the merger. The newly formed company will emerge as a leading player in Finland's forestry industry logistics, offering services that include the transportation of by-products from the forestry sector, internal logistics for industrial plants, and chipping services.

Both Tarkkala and Konne Group are well-established family-owned businesses that have experienced substantial growth through both organic means and acquisitions. The merged entity will boast a revenue exceeding €60 million in 2024 and employ over 300 individuals across Finland. Mika Liimatainen, the CEO of Konne Group, will take over as the CEO of the newly created organization, while Petri Tarkkala, CEO of Tarkkala Group, will serve as the Deputy CEO in charge of logistics operations.

Industry Overview in Finland

The logistics sector in Finland, particularly within the forestry industry, has undergone significant transformation in recent years, driven by increasing customer expectations. Logistics partners are now required to demonstrate adaptability and commitment to investing in modern, environmentally friendly equipment to optimize operations. Additionally, there is a growing focus on sustainability, digitization, and workplace safety, creating an evolving landscape in which companies must be proactive.

In Finland, the forestry industry plays a critical role in the economy, contributing significantly to both national employment and export revenues. The logistics associated with this sector are essential for ensuring that raw materials are efficiently delivered to processing facilities and end markets. As companies strive for greater efficiency and sustainability, the demand for specialized logistics services continues to rise.

The growth of the forestry sector is further supported by advancements in technology, driving the need for logistics providers to adopt innovative solutions. The integration of digital tools in logistics operations enhances efficiency and transparency, ultimately benefiting both service providers and their clients.

The Finnish logistics sector is also witnessing a trend toward consolidation, as firms seek to enhance their competitive advantage and improve service offerings through strategic partnerships and mergers. This is particularly pertinent in the forestry logistics segment, where efficiency and cost management are paramount.

Deal Rationale

The merger between Tarkkala Group and Konne Group is strategically aligned to position the new company as a leader in the forestry logistics sector in Finland. With increasing demands from customers for enhanced services and operational flexibility, the merging entities aim to combine their resources and expertise to deliver comprehensive solutions.

Moreover, the backing of Sponsor Capital is expected to provide the financial and managerial support necessary for the new company’s growth ambitions. The partnership is designed to leverage the strengths of both companies while tapping into the growing opportunities within the market through enhanced service offerings and customer satisfaction.

Investor Profile

Founded in 1997, Sponsor Capital is a Finnish investment firm focused on providing capital to small and medium-sized enterprises. The firm has a strong track record of supporting the development of Finnish businesses, having been involved with the growth of over 40 companies since its inception. Sponsor Capital primarily invests in firms based in Finland or those that have expanded abroad, helping them realize their growth potential.

Sponsor Capital's experience in partnering with growth-oriented companies, combined with its financial resources, positions it as an ideal investor for the newly formed Tarkkala and Konne Group. The firm intends to facilitate the integration process, enhance operational efficiency, and drive innovation to cement the new entity's market leadership.

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The merger between Tarkkala Group and Konne Group, supported by Sponsor Capital, is likely to be a sound investment decision that capitalizes on the evolving demands within the logistics sector. By merging their resources, the companies are strategically positioned to offer more comprehensive and competitive solutions, catering to the intricate needs of clients in the forestry industry.

Furthermore, the increasing focus on sustainability and technology presents significant opportunities for growth. Both companies bring modern fleets and high customer satisfaction levels, setting a solid foundation for future endeavors. The leadership team, with extensive industry experience, adds to the confidence in the company's potential for growth and expansion.

In conclusion, if effectively managed, the merged entity has the potential to achieve substantial growth. The demand for better logistics services will likely drive the company to further innovate and expand its offerings, ultimately leading to greater profitability and market share.

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