The client was a large international bank, holding a majority ownership in a publicly listed forest industry company engaged in several different business areas.

The bank's ownership and involvement in the forest industry company was a result of many years of financial distress, whereupon the company's bad credits were gradually converted into equity. The bank's long-term objective was to divest its shareholding in the most cost-effective manner.

Pöyry provided the client with a wide range of advisory services during several years of operational and financial restructuring and business development. We also had a leading role in the subsequent sales process. By utilising our international network, we formed an engagement team with a wide skill base - in market-related, strategic, technical and financial issues. With this team we were able to provide our proficiency and services throughout the divestment process at various levels in the client organisation. This close client relationship provided a unique understanding of the client's business, their specific problems and opportunities, which was a clear advantage in the sales process.

Engagement outline

Our initial task was to provide the client with a clear strategy on how to restructure and develop the operations in order to regain profitability and provoke investors' interest. This first phase included the following services:

• Technical assessment of the mills, identification of investment requirements, bottlenecks in production and development opportunities.
• Product and production repositioning, cost cutting and operations improvement measures.
• Financial advisory services related to capital allocation, investment cost estimates, incorporation of different businesses into subsidiaries, independent valuations for the local Securities and Exchange Commission.

Sales process

Subsequent to the results achieved in the restructuring phase, we proceeded to the divestment process itself. This was initially done in cooperation with third party investment banks. At that stage our services covered:

• Identification of potential buyers, analysis of investment rationale and strategic fit between the sales target and prospective buyers.
• Preparation of Information Memoranda for each business unit.
• Valuation of each business entity, both for the seller and public authorities.
• Development of case-specific investment scenarios and synergy analysis for prospective buyer candidates.