Case study

Acquisition of Finnish company brings bright prospects for iGuzzini

iGuzzini iIlumazione, Italy’s leading producer of technical and architectural lighting fixtures, acquired the Finnish company Pejan Oy to boost its business in Finland, Russia and the Baltic markets.

Established in Italy in 1958, iGuzzini is today one of Europe’s leading companies in the technical and industrial lighting sector. In 2008 the company had a turnover of EUR 215 million, with 1243 employees and a presence in 72 countries around the world.

 

In Spring 2009 iGuzzini completed the acquisition of the Finnish company Pejan Oy, a major supplier of professional lighting fixtures in Finland and the St Petersburg region in Russia. Pejan Oy’s turnover in 2008 was EUR 6.1 million and the company had 12 employees. The new subsidiary is now called iGuzzini Finland & Baltic Oy.

 

Having already collaborated on a business and personal level for 15 years, the two companies were no strangers to each other before the acquisition process. “Time allowed us to build mutual trust, fine-tune the communication channel, and understand how we can grow together to the benefit of both parties,” explains Enzo Paciaroni, Competitive Intelligence Senior Manager at iGuzzini.

 

Finland is a strategic choice

 

iGuzzini identified several important reasons that made Pejan Oy an attractive and timely target for the acquisition. Firstly, Pejan Oy had established a strong market position thanks to its good long-term customer relationships both in Finland and the St Petersburg area.

 

“The possibility to operate in the Baltic area with our own structure appeared as a natural continuation of the fruitful collaboration between the companies. iGuzzini Finland & Baltic Oy allows us to reinforce our presence in Finland and to operate in countries such as Estonia, Latvia and Lithuania,” says Adolfo Guzzini, President of the Board of Directors at iGuzzini. “We can also meet the lighting requirements of Saint Petersburg, a city where lighting projects with iGuzzini fixtures are already numerous and well known.”

 

The acquisition is part of iGuzzini’s long-term internationalization strategy. “The acquisition gave iGuzzini the opportunity to create a strategic service and logistics concept in Helsinki that could serve the whole of the northern Baltic region and southwestern Russia,” says Tommi Reijola, former managing director of Pejan Oy and now the managing director of iGuzzini Finland & Baltic Oy.


Mutual benefits

 

iGuzzini has also benefited from Pejan’s small but highly committed and knowledgeable staff, who had been working for the company for many years. “One of the conditions of the acquisition was that the management of Pejan Oy would also continue to work for iGuzzini Finland & Baltic Oy as minority partners,” explains Reijola.

 

In practical terms the acquisition took about one year to complete. iGuzzini declared its interest in Pejan Oy during the first quarter of 2008, after which the companies worked closely together to prepare for the acquisition. iGuzzini also carried out an external Due Diligence analysis on Pejan Oy before completing the investment.

 

“Our experience of establishing a business operation in Finland has been absolutely positive!” says Paciaroni enthusiastically. “The synergy that had been created between distributor and mother company has made the transition simple, even spontaneous. Their knowledge of products and stakeholders has been rapidly integrated with the traditional know-how of our company.”

 

For iGuzzini the acquisition means operating with higher awareness on the market, with quicker and more focused answers, according to Guzzini. For Pejan Oy it presents an opportunity to enjoy being part of an international operation with a strong brand and a leading market position.

 

According to Adolfo Guzzini, iGuzzini Finland & Baltic Oy has made a great start. “Just a few months after the acquisition, we are already operating well, with good motivation and awareness of the market.”


A promising market

 

How does Finland’s business environment shape up from an Italian perspective? “The market is very promising, open and slim from the legislative viewpoint. There is great attention to lighting issues and an excellent culture in terms of lighting design,” says Enzo Paciaroni.

 

He also appreciates the fertile cultural fabric of the country and its rich architectural heritage. “Finland is ready to receive and appreciate the iGuzzini lifestyle and our proposals for light as an active part of the design process.”

 

iGuzzini Finland & Baltic Oy is already aligned with the corporate culture of its Italian parent company, which is known for its commitment to energy efficiency and reducing lighting pollution, as well as promoting light for the arts and its love for design.

 

Thanks to a well-executed acquisition process, iGuzzini seems set for further success in Finland, St Petersburg and beyond.