Purmo Group Acquisition: Key Details, Impact, and What Comes Next

The acquisition of a 94.53% stake in Purmo Group by Apollo-managed funds and Rettig marks a significant development in the indoor climate solutions industry. This strategic move aims to bolster Purmo Group's growth and enhance its role in the clean energy transition, aligning with Apollo's extensive investments in sustainability. The transaction underscores the increasing importance of sustainable solutions in the global market.

What Is Purmo Group?

Founded in 1953, Purmo Group specializes in indoor climate comfort solutions, offering both hydronic and electrical systems. Their comprehensive approach spans from the generation of heating or cooling to its distribution, emission, and control. A key differentiator is their commitment to sustainability, guided by a route map with four focus areas and ten measurable commitments. Additionally, Purmo Group emphasizes a strong corporate culture, valuing motivated and talented individuals as a cornerstone of their success.

Who Acquired Purmo Group?

Apollo Global Management is a prominent provider of alternative asset management and retirement services. The company offers a range of products, including investments in Credit, Equity, and Real Assets, as well as retirement solutions through Athene. Known for its disciplined and responsible investment approach, Apollo plays a significant role in private investment-grade and fixed-income markets. Its influence is marked by its ability to drive positive outcomes, support business growth, and promote sustainability initiatives.

When Was Purmo Group Acquired?

Apollo Global Management, in collaboration with Rettig, completed the acquisition of a 94.53% stake in Purmo Group on August 16, 2024. This acquisition aligns with Apollo's Clean Transition Equity strategy, reflecting a broader industry trend towards sustainable investments. Over the past five years, Apollo has invested more than $40 billion in energy transition and sustainability-related projects, underscoring the growing importance of clean energy solutions in the market.

Why Was Purmo Group Acquired?

• Market Expansion: The acquisition aims to accelerate Purmo Group's growth strategy in Europe and beyond, leveraging additional resources and expertise from Apollo and Rettig. Purmo Group will continue to design, manufacture, and distribute products to over 100,000 customers in more than 100 countries, unlocking its growth potential and expanding its market reach.
• Technology Integration: Purmo Group focuses on sustainable indoor climate solutions, including underfloor heating and cooling systems, radiators, heat pumps, flow control, hydronic distribution systems, and smart products. The acquisition supports Purmo Group’s mission to be a global leader in sustainable indoor climate comfort solutions, potentially leading to innovative product development in sustainable technologies.
• Competitive Advantage: The partnership with Apollo and Rettig provides Purmo Group with significant resources, expertise, and a longer investment horizon, which are crucial for accelerating its growth strategy. Apollo’s extensive experience in energy transition and sustainability-related investments further strengthens Purmo Group’s position in the market, providing a competitive edge in the growing sector of sustainable and energy-efficient solutions.

Acquisition Terms

• Acquisition Price: Shareholders received €11.06 per C share, Rettig received €10.53 per C share, and €6.75 was paid for each F share ineligible for conversion into C shares.
• Payment Method: The payment was made in cash for each share.
• Key Conditions or Agreements:  
  • Apollo funds and Rettig will acquire the remaining outstanding shares through Project Grand Bidco (UK) Limited.
  • Purmo Group will be delisted from the Nasdaq Helsinki Stock Exchange.
  • Post-acquisition, Apollo funds will own 80% and Rettig 20% of Purmo Group.
  • Purmo Group will continue to operate as a privately owned business led by its current management team.
  • The transaction aligns with Rettig's strategic ambition of reducing its ownership in Purmo Group while continuing to support the company as a strategic minority shareholder.
  • The acquisition supports Apollo’s commitment to energy transition and sustainability-related investments.

Impact on Purmo Group

The acquisition of Purmo Group by Apollo and Rettig has led to significant operational changes, including the delisting of Purmo Group from the Nasdaq Helsinki Stock Exchange. Despite this, the company will continue to operate under the leadership of its current CEO, John Peter Leesi, and the existing management team. This continuity ensures that Purmo Group can maintain its strategic focus on designing, manufacturing, and distributing sustainable indoor climate solutions. The additional resources and expertise from Apollo and Rettig are expected to accelerate Purmo Group's growth strategy, particularly in Europe and other global markets.

Regarding product offerings, the acquisition aims to bolster Purmo Group's role in the clean energy transition, potentially leading to innovative developments in sustainable indoor climate technologies. While specific changes to products or services have not been detailed, the emphasis on sustainability suggests future enhancements. Employee reactions have not been explicitly documented, but the stability in management may provide reassurance. Customer reactions are also not specified, though the continued service to over 100,000 customers in more than 100 countries indicates a commitment to maintaining high standards. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly and efficiently.