Kotikatu grew into a success story by combining agile locality with scalability – now continues to grow with a new owner
In residential property services, customers value locality, familiarity and a broad service offering. The property services company Kotikatu and Vaaka Partners, the private equity firm accelerating its growth, have successfully scaled a traditionally small and local business into a nationwide one – while still maintaining a local, humane approach. Following the rapid growth, Vaaka Partners is now selling Kotikatu to the private equity firm Norvestor. In the transaction, Kotikatu and PHM Group will merge to become Finland’s leading provider of residential property services.
For the last few years, the residential property service sector has been in transition and Kotikatu has played a significant role in this development. Kotikatu’s growth has been based on acquisitions, with 37 of them made since 2015. Now, the growth continues as Kotikatu and PHM Group, owned by the private equity firm Norvestor, join forces. The transaction is currently pending approval from the Finnish Competition and Consumer Authority.
The merger would lead to Kotikatu and PHM Group taking over the leading position of their market sector. Together PHM Group and Kotikatu can offer their customers services locally on a nationwide basis. Their strong local presence and broad service offering will be available to an even greater number of Finnish residential property customers. A new Nordic dimension will also be involved, as 40% of PHM’s revenue is already generated in Sweden.
Small and large in the same package
Following the growth strategy made with Vaaka Partners, Kotikatu has grown into a company of 6500 client properties and 1500 professionals within the last five years. During the same period, its revenue has roughly quadrupled to over 100 million euros.
“Our work is based on the principle of making things right the first time. Customer service and depot sites located near customers create the best possible foundations for smooth, high quality and customer-focused property maintenance services. When our property caretakers receive work orders during the day, they are already likely to be just around the corner from the customer who requested the work. This way, we can act quickly while minimizing driving around in a car. It’s a win for both the customer and the environment”, says Kotikatu’s CEO Jussi Niemelä.
“With a unique business model combining locality and scalability, Kotikatu has achieved a leading position in a relatively short time. Through its locally focused organization structure, Kotikatu is able to provide superior customer service. On the other hand, the scalability of the group has resulted in a broad service offering as well as benefits in administration, procurement and marketing. I would dare to claim that Jussi and the team at Kotikatu have managed to combine the agility of a small company with the benefits of scaling to the advantage of their customers in an exceptional way,” continues Panu Vuorela, a partner of Vaaka Partners and Kotikatu’s board member.
“Merging with another company emphasizing local services, meaning Porvoo-based PHM, is the natural next step in Kotikatu’s growth story”, Vuorela continues.
Growth by listening
Kotikatu’s successful acquisitions have all been based on a clear method of listening to business owners, making it easy for small companies to become a part of Kotikatu.
“Every acquisition is made in close cooperation with the business owners, and their wishes are listened to with care – after all, for many owners it’s a question of their life’s work! Our acquisition team makes sure that even the smallest of details are considered and the passing of the torch happens smoothly. Many business owners have even wanted to stay and work for us after the acquisition, which of course makes us very glad,” Niemelä says.
Vaaka has supported the company in stepping up their pace of growth, and according to Niemelä, it is not going to slow down in the future either.
“Working with Vaaka has been smooth and productive, and the company has taken a huge leap during Vaaka’s ownership. And we still have the desire the grow. For the customer, the basic things will remain the same. We look after our customers and will continue to take care of their properties in the future”, Niemelä concludes.
For further information:
Jussi Niemelä, CEO, Kotikatu Group
Telephone: +358 400 462 696
Panu Vuorela, partner, Vaaka Partners
Telephone: +358 40 510 0952
Kotikatu in brief:
Kotikatu is Finland’s largest property services company with approximately 6500 housing cooperatives as clients. Combined, these cooperatives have a total of 110 000 apartments, inhabited by almost 300 000 residents. Kotikatu is formed of specialized units providing property maintenance services that operate in the Helsinki capital region, Pirkanmaa, Lahti, Pori, Jyväskylä, Kuopio and Oulu.
PHM Group in brief:
PHM is a Finnish corporation specialized in servicing and maintaining properties, with approximately 6000 clients. The company also has a significant presence in Sweden (comprising almost 40% of total revenues). PHM serves its clients locally through independent subsidiaries while focusing on quality and flexibility.
Vaaka Partners in brief:
Vaaka Partners is an ambitious private equity firm that helps medium-sized Finnish companies become business champions. Companies owned by Vaaka include Framery, Jungle Juice Bar, Lyyti and Molok. The company is responsible for private equity funds of approximately 0.5 billion euros. The Vaaka approach combines strategic and operational insight with trust-driven collaboration and new growth opportunities. Leading European pension funds are the principal investors in Vaaka funds.
Norvestor in brief
Norvestor is a leading private equity firm focusing on mid-market buyouts in the Nordic region, with offices in Oslo, Stockholm, Helsinki and Luxembourg. The team has worked together since 1991, making it one of the most experienced private equity teams in the Nordics. They have executed 72 investments and over 270 additional buyouts following M&A transactions, in addition to executing 51 exits (incl. 15 IPOs). Norvestor seeks to invest in Nordic growth companies that have the potential to achieve a leading position either in the Nordic region or internationally through organic growth, acquisitions or by geographic expansion.