Pegroco invests in smaller and medium sized companies, predominantly in Sweden. We do not target specific business categories or sectors, we look for companies with an established market position and with a potential for growth.
Our investment idea is that we, with our collective know-how and experience, and our network, can be active owners. We can supplement the portfolio companies’ managements’ business ideas and entrepreneurship to together build additional value. It is this active ownership that differentiates Pegroco from most other investment companies.
We therefore often consider it an advantage if the company is in need of change. The need can be structural or business oriented. It can for example be when management wants to buy out the operation from the owners, or when the entrepreneur owner wants to expand the company to exploit new business opportunities but lacks resources. Or it can simply be when the owner wants to sell out after many years of hard work.
We like the company to have a potential for international expansion – Pegroco has a proven capability to grow its portfolio companies internationally. Pegroco always considers the possibility to speed up the growth process and value creation with supplementary acquisitions. Pegroco Invest invests from its own balance sheet and is therefore not dependent on fund financing and a fund’s typical time constraints.
We put emphasis on the entrepreneur’s and the key personnel’s continued involvement in the operations we invest in. Normally we want the key personnel to play an active part in our collective “journey”.
If this description should in any way match your business situation, feel free to contact us for an exploratory meeting.
Holdings portfolio, Base and Growth companies
Pegroco seeks a balance between the investment categories Base and Growth. Pegrocos assessment is that this balance over time will give Pegroco’s shareholders the best return. During the twelve months up to June 30, 2018 Pegrocos Base and Growth portfolios had a combined turnover of 1 510 MSEK. Further to active holdings Pegroco has holdings in a number of other companies where Pegrocos owner’s share is smaller. The companied turnover of the whole portfolio is 1 959 MSEK.
Investment category Base
The companies in this category should have a proven business model, a strong market position and, over time, a stable positive cash flow. Pegrocos ambition is to own over 50 percent. Pegroco likes to see the companies in this category generate a considerable part of revenues from service and maintenance. These revenues have the advantage that they often are based on long term contracts and therefore provide better revenue visibility. Furthermore such a business is often less capital intensive, less business cycle sensitive and less exposed to technical changes. A central strategy in the Base category is to form hub-companies around which Pegroco can make supplementary acquisitions. Both Nordisk Bergteknik within ground engineering and Nordic Lift within lift services are examples of this.
Investment category Growth
In the Growth category there are several technology companies. Common for these are that the technology should have tangible and computable financial customer benefits, scalability and international export potential. Pegroco also likes to see that the the company’s technology is environmentally beneficial and that its market expansion can take advantage of an underlying environmental trend. An example is Alelion, a provider of lithium-ion energy solutions for the industrial vehicle segment, which can take advantage of the general trend towards electrical vehicles. Alelions solutions enable customers to shift from the diesel engines and lead/acid batteries to the much more environmentally friendly lithium-ion batteries – and at the same time save hundreds of thousands per industrial vehicle over its life.
Read more about each company under the menu Holdings.