Hägglunds Drives

From local player in Norrland to world-leading company in its niche

One of Ratos acquisitions from Atle in 2001 was Arcorus, which consisted of three hydraulics companies: GS-Hydro, Hägglunds Drives and Lidan Marine.

Hägglunds Drives is situated in Mellansel, northwest of Örnsköldsvik, and manufactures hydraulic drive systems and hydraulic motors for heavy applications within fields such as materials handling, recycling, marine and offshore and paper and pulp.

The company expanded rapidly, primarily through organic growth. Hägglunds Drives also implemented a couple of acquisitions, added new products and developed the aftermarket. New sales companies were established around the globe. In 2006, the company received the Export Hermes award.

Hägglunds Drives sales increased from SEK 900 million in 2001 to almost SEK 1.8 billion in 2007. Operating profit increased during the same period from SEK 75 to 360 million. The number of employees increased from 500 to 1,000.

Per Nordgren became managing director of Hägglunds Drives in 2001. He describes Ratos as a very professional owner, with a long-term perspective that added competence to the board and served as a sounding board for company management:

Ratos had a clear desire to develop and to invest. It wasn’t a case of anonymous accountants nosing their way through the figures and staring at excel spreadsheets, but rather it was flesh and blood individuals who supported us and challenged those of us in management. I also appreciated the fact that they were so accessible. They made themselves available at sales meetings and in other contexts, familiarising themselves with our organisation.

Alte had as its goal with the acquisition of Arcorus to transform it into a large hydraulics group. That ambition could not be fulfilled, however. The synergies among the three companies also proved to be limited. As a result, Arcorus was dissolved and Hägglunds Drives came under direct ownership of Ratos in 2005. The goal was, above all, to grow the company by focusing and investing in business development.

During spring 2008, Ratos began preparing an exit for Hägglunds Drives, and several proposals were received from interested investors. On July 18, Ratos announced that all shares in Hägglunds Drives would be sold to the German firm Bosch Rexroth for approximately SEK 4.3 billion. The sale resulted in an exit gain for Ratos of approximately SEK 4.4 billion (IRR 56%).

Per Nordgren stayed on as managing director for one additional year and now works as an industrial advisor, including for Ratos.