OpenGate Capital Signs Agreement to Sell Kotkamills to Finnish Private Equity Firm MB Funds

OpenGate Capital, a global private equity firm, announced today it has signed an agreement to sell one of its portfolio companies, Kotkamills Oy, to MB Funds, an independent Finnish private equity firm focused on acquisitions in the Nordic market. Kotkamills is located in Kotka, Finland and is a manufacturer of specialty papers and wood-based products. The transaction is expected to be complete within the next 60 days. Financial terms were not disclosed.

OpenGate Capital acquired Kotkamills from Stora Enso in July of 2010. From the onset of the acquisition, OpenGate viewed Kotkamills as a business with tremendous potential for growth and renewed profitability. In the four and a half year holding period, and under the guidance of OpenGate’s European investment team, the business achieved significant results including:

• Completed the carve-out and transition of three separate business entities into a single, integrated operation
• Successfully implemented cost optimization and product rationalization programs
• Re-established leadership position of the laminating paper business by enhancing innovation and developing new, environmentally friendly products to augment portfolio of papers
• Grew revenue by nearly 25%
• Increased profitability by nearly €14 million, growing EBITDA to a new and healthy level

Andrew Nikou, OpenGate Capital’s founder and Managing Partner, stated, “I am incredibly proud of the hard work and focus that our European team applied to Kotkamills. This was one of our earlier acquisitions, and Kotkamills required significant transition and transformation work at a time when our firm had fewer resources but a clear vision for what could be accomplished. It was under the leadership of Julien Lagrèze that we achieved such success and I know the entire team at OpenGate shares in my enthusiasm.”

Julien Lagrèze, Partner at OpenGate Capital who oversees all European investment activity, commented, “Since 2010, Kotkamills has undergone a series of transition, stabilization and growth initiatives that enabled the business to adjust to changes in the paper market, respond to demands for eco-friendly products, and mitigate against the continual decline in magazine papers. Through the leadership of Kotkamills’ CEO, Tuija Suur-Hamari, the entire Kotka staff, and our strategic partner, Powerflute Oy, the business of Kotkamills today is extremely well positioned for its next phase of growth under the stewardship of MB Funds.”

Kotkamills CEO, Tuija Suur-Hamari stated, “It has been a sincere pleasure working with the team at OpenGate Capital. Under their guidance, we have been able to accomplish tremendous growth and created measurable, new value. The Kotkamills business has been transformed into a thriving and stable operation and we are well positioned for continued growth.”

Kotkamills’ heritage dates back to 1872 and is recognized for its excellence in production, customer service, research, product development and sustainability efforts, and is known for products such as the Absorbex, Imprex and Solaris brands. The business has operations in Finland and Malaysia and employs more than 500 people.

About OpenGate Capital, LLC

OpenGate Capital is a global private equity firm specializing in the acquisition and operation of lower middle market businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and maintains offices in Paris, France and São Paulo, Brazil. OpenGate’s seasoned professionals possess the critical skills needed to acquire, transition, operate and build successful businesses. To date, OpenGate Capital has executed more than 30 transactions ranging from corporate divestitures to turnaround acquisitions, industry consolidations and other special situation investments. The OpenGate portfolio of businesses generates approximately $3 billion in revenue and includes businesses from a wide range of industries and geographic markets. For more information, please visit www.opengatecapital.com.