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Coop Pank financed the purchase of Toom Tekstiil

Toom Tekstiil, the company which was founded in 1995 and is one of the largest employers in Viljandi County, now has new Estonia-based owners who aim to continue the production of textile and furniture for the domestic and export market in Viljandi and Abja-Paluoja.

Under the deal signed at the end of last week, Illimar Toom and Innar Susi, the previous shareholders of AS Toom Tekstiil, sold their majority stake they had owned through their companies. The buyer is the company Smart Production Nordic OÜ, which is a group consolidating investors with substantial experience in manufacturing and textile industry. The transaction is being financed by Coop Pank.

The group of investors which has acquired the company is represented by Vahur Roosaar, who has been the CEO of Toom Tekstiil since May and will continue in the role of the chairman of the management board after the transaction has been completed. Roosaar comes from Viljandi and worked for Toom Tekstiil in 2001–2002. In addition to Roosaar, the management of Toom Tekstiil will include Peep Armväärt, whose previous work for Toom Tekstiil lasted for quite a lengthy period.

Illimar Toom, the founder of Toom Tekstiil, says that he has decided to sell the company as he would like to focus on other endeavours. “Several prospective buyers had expressed their interest in Toom Tekstiil, and it was their vision which determined the choice. I am convinced that the company’s new owners are experienced and have a clear vision, so it will be thriving and growing under their leadership. Our condition for the sale was that production in Viljandi and Abja-Paluoja would not be ceased, and such confirmation has been given by the new owners,” Toom said. Under the agreement of the parties, the price of the transaction is not to be disclosed.

Vahur Roosaar says there are no plans for any dramatic reorganisation of the company’s operation, but certain innovations in production and sales are necessary. “Toom Tekstiil is a well-know and strong player in its field, which lays a good foundation for moving forward. We are planning to continue manufacturing textile products for the Estonian and export market. We aim to double the business volume in a couple of years and make Toom Tekstiil more profitable. In addition to the current lines of business, we want to focus on the products and clients which will create higher added value. This will, naturally, require further investments in technologies, development, people and processes alike. Estonian manufacturers might find it difficult to compete with global mass production, but we have an opportunity to make good use of the strength available here: ensure higher quality and smarter production. It is especially in the Nordic countries that Estonian textiles and furniture are known for their quality, which creates export opportunities for us. For Peep and me, this change means returning to the company we previously used to work for, but this time we will be playing on the owners’ level,” Roosaar said.

Hans Pajoma, member of the board and head of business customer banking at Coop Pank, which is financing the deal, said that the bank had thoroughly analysed the business plans it had received and decided to support the financing of the transaction. “We were convinced and firmly believed that the new owners and management would be able to expand the company’s operation ad ensure its development, which was decisive for the financing of the transaction concerning Toom Tekstiil. Production companies which focus on export and are located beyond Harju County are of vital importance for Estonia’s regional development. As one of the largest employers in Viljandi County, Toom Tekstiil is a good example of a production company with enduring traditions which also has a great potential. We expect Coop Pank’s role in supporting the development of other Estonian companies to keep becoming more and more important, which will allow us to contribute to Estonia’s economic development,” Pajoma said.

Consulting for the transaction of the sale and purchase of Toom Tekstiil was provided by Aureus Capital Consulting on the seller’s part and by Smart Production Management with Uplegal Advokaadibüroo law firm on the buyer’s part. Smart Production Management features a team with extensive experience in the field of production, finance and management, and consulting in the process of the acquisition of Toom Tekstiil is the firm’s first major project. There is a plan in place for further investments in various companies, using the team’s broad and comprehensive practical knowledge.

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