Welcome to Industri Udvikling's website. In the following you will find various information about our company and our way of thinking. Please do not hesitate to contact us if you would like further details about any of the information set out below.
Address: Industri Udvikling, Gothersgade 175, 2nd floor, DK-1123 Copenhagen K, Denmark
Telephone: +45 3336 8999
Fax: +45 3336 8990
Under the heading "Downloads" under the "Om IU" menu, you can download a presentation brochure in English (2014/15) and annual reports for Industri Udvikling in Danish.
Mission / Investment criteria
Industri Udvikling was formed in 1994 with the object of setting up a private equity company that was to invest in small and medium-sized Danish manufacturing companies.
Industri Udvikling invests primarily in Danish manufacturing companies with sales up to DKK 300-400 million, with the aim of developing the companies over a number of years.
Industri Udvikling participates in the portfolio companies' development by exercising active co-ownership through Supervisory Board meetings and regular contact with management.
Industri Udvikling is always a minority shareholder, initially.
Industri Udvikling's (initial) investment will typically be in the region of DKK 5-30 million, in return for which Industri Udvikling gains a 25-50% stake. Industri Udvikling may invest in partnership with other investors if the funds required exceed the range referred to above.
Industri Udvikling invests both in connection with succession, change of ownership in general, growth beyond what can be financed by the company's earnings, and, in some cases, in companies that have lost a substantial part of their equity.
Industri Udvikling is not tied to specific industry sectors, but invests broadly within manufacturing companies. The portfolio features both companies with their own product(s) and companies that operate purely as subsuppliers. Industri Udvikling prefers each portfolio company to either have or be able to achieve a strong position in its sector.
The decision to invest in companies of a certain size is based on the fact that slightly larger companies are normally less vulnerable and also more receptive to Industri Udvikling's philosophy. In addition, these companies have several years' experience within their respective business areas, providing a more substantial basis for evaluating the business.
Industri Udvikling invests exclusively in companies with Danish roots.
Form of investment
Industri Udvikling invests by contributing share capital and/or providing subordinated loans combined with a right to subscribe for shares. Industri Udvikling acts with an owner's rights, regardless of whether the investment is made in the form of a subordinated loan or share capital. In several cases subordinated loans are used as a supplement to share capital, either to reduce the amount to be contributed as share capital or to optimise the ownership structure.
Subordinated loans combined with a right to subscribe for shares are often a constructive and fruitful form of investment. Subordinated loans can act as leverage for the often difficult valuation discussion when subordinated loans are used as bridge for the subscription price for shares when it is tied to the actual future performance.
Industri Udvikling wants to be represented on the Supervisory Board of its portfolio companies, also where the investment is made in the form of a subordinated loan rather than formal co-ownership.
The composition of the Supervisory Board is tailored to the individual company. Industri Udvikling prefers the chairman of the Supervisory Board to be an experienced person with a CEO background, combined with time to be the relevant sparring partner for the Executive Board. Industri Udvikling always participates directly in the Supervisory Board work.
Industri Udvikling's working method
Each year, Industri Udvikling receives many enquiries that present investment opportunities. Some are carefully prepared investment prospects, others are presented as ideas in the course of a telephone call.
Industri Udvikling visits between 40 and 60 companies a year. The company introduces itself, and its situation and potential are discussed. This forms the basis for a discussion as to whether the parties can find common ground for the further development of the company.
If the discussions are judged to have been positive, the initial meeting is often followed up by a letter. The letter normally sets out various capital injection options, along with the main assumptions on which these options are based.
When the investment is made, two documents are prepared, a shareholders' agreement and an agreement related to investment. The agreements ensure the parties' mutual rights and obligations.
Industri Udvikling rarely carries out a formal due diligence prior to making an investment. Instead, Industri Udvikling undertakes a general review, assessment and discussion of the company, its history and its potential. Areas that are particularly important and/or involve particular risk are naturally subject to more in-depth research.
The contract documentation is prepared by lawyers. The assessment of the company and its potential is carried out in-house, as it is during this close dialogue that Industri Udvikling gets to know the company.
All potential investments are submitted to Industri Udvikling's Supervisory Board for approval.
Industri Udvikling's investments
Since its establishment in 1994, Industri Udvikling has invested in a total of 134 companies. During this period, Industri Udvikling has been one of the principal investors within its segment. Also during this period, Industri Udvikling has established a well-functioning team with extensive knowledge within both the investments and the subsequent development of the companies.
Following divestments and losses, Industri Udvikling today has a portfolio of 33 companies. The portfolio value stood at DKK 933 million at 31 December 2017.
Legally, Industri Udvikling is organised into the entities Industri Udvikling A/S, Industri Udvikling II K/S, Industri Udvikling III K/S and Industri Udvikling IV K/S with the latter being the vehicle through which new investments are made.
There is no fixed timeframe for how long a company should remain in the ownership of Industri Udvikling.
It generally applies that if a company ceases developing or if Industri Udvikling can no longer contribute anything to the company, considerations concerning exit normally commence.
Exit is achieved by divestment of the entire company or merely Industri Udvikling's ownership interest.