Information on the Target

Tietokeskus is a leading independent ICT infrastructure service provider in Finland, catering primarily to small and medium-sized enterprises (SMEs) and the public sector. The company specializes in various services, including IT infrastructure outsourcing and support, equipment delivery, lifecycle management services, and IT infrastructure consulting, design, and deployment. Since the acquisition by Vaaka Partners Buyout Fund II Ky (Vaaka II) at the end of 2016, Tietokeskus has successfully completed seven acquisitions, with the most recent purchase of MPY Yrityspalvelut finalized in June 2023. The projected pro forma revenue for Tietokeskus in 2023 is estimated at €132 million.

Industry Overview in Finland

Finland's ICT sector is one of the most advanced in Europe, characterized by a high level of digitalization and a robust infrastructure that supports a thriving tech ecosystem. The nation has seen a rapid increase in the demand for ICT services, driven by the need for digital transformation across various industries. As SMEs and public sector organizations seek to enhance their operational efficiency through technology, demand for comprehensive ICT solutions is expected to grow significantly.

In particular, the outsourcing of IT services has become a strategic option for businesses aiming to focus on their core competencies while leveraging external expertise for their technological needs. This trend is further accelerated by the rising sophistication of cyber threats, prompting organizations to invest in professional ICT services to ensure the security and efficiency of their operations. The increasing adoption of cloud solutions and remote work policies has also steered a transformation in the way ICT infrastructure is managed and supported.

Finland’s supportive business environment, characterized by government initiatives and funding schemes for innovation, coupled with a highly educated workforce, fosters growth in the ICT sector. Many startups and established companies are actively engaged in developing pioneering solutions in areas such as artificial intelligence, machine learning, and data analytics, which further enrich the landscape.

As the demand for ICT services persists across different sectors, providers like Tietokeskus are well-positioned to capitalize on the opportunities that arise from this dynamic environment. Their strategic emphasis on providing tailored solutions and ongoing support to SMEs and public organizations reflects a deep understanding of the market needs and trends.

The Rationale Behind the Deal

This transaction enables Vaaka Partners to equip Tietokeskus, its original founders, the management team, and employees with the resources to sustainably support the company’s future growth. The partnership will not only facilitate the integration of MPY Yrityspalvelut but will also provide additional capital that can be allocated towards strategic acquisitions. By consolidating their position in the market, the stakeholders aim to enhance operational capabilities and expand service offerings.

Furthermore, eQ, one of Finland's leading private equity investment managers, joining as a new investor alongside Vaaka IV underscores the confidence in Tietokeskus's growth potential and the promising future of the ICT sector in Finland. The collaboration is expected to enhance Tietokeskus's operational depth and market engagement, ultimately fostering sustained growth.

Information about the Investor

Vaaka Partners is a prominent private equity firm based in Finland, recognized for its strategic investments focused on mid-market companies. The firm employs a hands-on approach in enhancing value through operational improvements, strategic guidance, and support for growth initiatives. Vaaka Partners Buyout Fund II Ky has played a crucial role in Tietokeskus's evolution by fostering an environment of growth and innovation since its acquisition.

The recent involvement of Vaaka Partners Buyout Fund IV Ky further strengthens the firm’s commitment to propel Tietokeskus to the next phase of its development. By leveraging its expertise and resources, Vaaka Partners is dedicated to ensuring that Tietokeskus remains a key player in the Finnish ICT landscape while pursuing its strategic objectives.

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This deal presents a favorable outlook for Tietokeskus and its investors, as the ongoing support from Vaaka Partners positions the company for significant growth. The ability to integrate MPY Yrityspalvelut into Tietokeskus’s operations not only expands their service portfolio but also enhances their competitive edge within the market. The strategic partnership signifies a proactive approach to capitalize on emerging opportunities, which is essential in the fast-evolving ICT landscape.

The backing from a reputable investor like eQ emphasizes the attractiveness of this investment. Their confidence in Tietokeskus's operational strategy and growth trajectory further validates the decision to proceed with the deal. Additionally, as the digital transformation continues to gain momentum in various sectors, Tietokeskus stands to benefit from increased market demand for their services.

Ultimately, this acquisition is likely to create a robust foundation for Tietokeskus, enabling it to enhance stakeholder value and solidify its leadership in the Finnish ICT service market. This strategic move not only indicates a sound investment decision but also aligns with the overarching trends driving growth in the technology sector.

Considering these factors, this investment appears to be a strong opportunity for Vaaka Partners and its stakeholders, provided they continue to deliver exemplary service and maintain a keen eye on market developments.

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