DEAL TALKS: Livonia Partners sells majority stake in Thermory

14 July 2020
Again some great news from our members. Livonia Partners has sold a majority stake in Thermory to UG Investeeringud. Our DEAL TALKS series reflects on the transaction with Livonia’s partner Kaido Veske.

1.    What makes Thermory unique?

Thermory’s journey was one with multiple twists and turns. Actually, we initially invested in Ha Serv in February 2016 when it was a single-entrepreneur company in the wood processing sector, an industry with long traditions and multiple successes in the Baltics. Our original conviction was to invest in market leadership, strong cash flow and management talent. These guiding principles never changed. In the end, we helped transform a €20 million revenue company to a €100+ million revenue company in a little more than 4 years. We started with less than 200 employees and today welcome to work worldwide almost 650 people. We feel like Thermory today is a company that customers, employees, suppliers, investors, and the like are proud to have built.

2.    How do you assess the impact of the investment?

Early in our investment, we identified the transformational growth trend underlying the thermowood industry – how much better it is to the environment compared to plastic alternatives and in relation to the deforestation of rainforests. We wanted to enter the industry decisively and thus identified and acquired Suomen Lämpöpuu in Finland. This acquisition further opened our eyes towards painted wooden products and its potential, a conviction that later led us to acquire Siparila in Finland. The most significant of the deals was merging Ha Serv and Thermory, thereby creating the absolute worldwide leader in the thermowood industry. Global warming is real. Corporate environmental responsibility is a goal as much as it is a strategy. At Livonia we have always understood those connections. 

3.    What are the most important angles you assess in your investments?

Cash flow and talent. There is a large value gap these days in private equity on how much cash flow is appreciated versus growth. At Livonia, we always leaned towards defending the former. With Ha Serv and later with Thermory, it allowed us to invest in production capacity, new business lines, complete strategic add-on acquisitions, hire new talented people, etc. We are grateful to SEB bank for believing in the company as much as we did. We started with one single facility in Tartu and ended with 8 facilities, 2 warehouses and 2 sawmills across the globe. All due to the strong cash flow of Thermory.

I had the pleasure to work with and learn from some of the most talented people in the industry; Meelis Kajandu, Jaana Kurelauk, the list is long. There were two very important leadership biases in these people: bias for action versus constant reflection, and bias for tomorrow versus yesterday. With the key people, we always felt comfortable where we needed to go. We made mistakes, we were slow, sometimes misaligned. Yet in the end, we could support and count on the hard work, intuition and leadership of the people we trusted. 

Livonia going forward

There is an unwritten rule in private equity that the fund's first, last and largest investment do not work out. Thermory was our first and largest investment and if the rest of our portfolio produces the same results, we will be by far the best investor in the region and one of the best in Europe. My partner Mindaugas Utkevičius and I had a race for who would build the first €10 million EBITDA company. I won the first round, he and my other partners will certainly win others. Buying and building companies is a passion of ours at Livonia. We thank our investors for trusting us in our work. We have more than enough capital left in our existing fund and are actively progressing with our next.


Further information:

Kaido Veske
Livonia Partners


  • UG Investeeringud and Livonia Partners received regulatory approval to proceed with the sale of Thermory and completed the transaction on July 9th. 

Livonia Partners is the only pan-Baltic dedicated private equity investment fund, currently managing €83 million as part of the Livonia Partners Fund I and the Livonia Partners EIF Co-Investment Fund. Run by founders Kaido Veske, Kristīne Bērziņa, Rain Lõhmus, and Mindaugas Utkevičius, its investors are domestic and international financial institutions.


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