Coromatic: A safe haven in the storm
Imagine that a disruption in the power supply suddenly cuts off the electricity to a hospital, an airport or a bank, bringing operations to a halt. What a disaster, right? Luckily, EQT portfolio company Coromatic prevents such scenarios by securing access to power and data communication so that companies and organizations can run their operations without disruption. Following the appointment of CEO Erik Bertman last year and a newly implemented service-led strategy, Coromatic is delivering record results.
Today, most people take access to electricity for granted – in fact, many of us probably do not even have a plan B if the lights go off. This also applies to companies and organizations where seemingly basic requirements such as power supply and data communication are crucial to maintaining their everyday operations. New megatrends in digital behavior, including explosive growth in data transfer and storage, are also creating increasing dependence on stable digital infrastructure and secure power supply.
Acquired by EQT Expansion Capital II in 2011, Coromatic provides a solution to these challenges by ensuring connectivity to power and data communication 24/7. Coromatic serves customers where power disruptions are associated with critical risk and security concerns, such as data centers, airports, hospitals, transportation and connected workplaces. As the only full-scope provider in the critical facilities value chain, Coromatic offers maintenance and prevention, operational and advisory services. The company also provides solutions within data center infrastructure, emergency power and uninterrupted power supply.
A re-focused service strategy that is paying off
In January 2018, EQT strengthened Coromatic’s management team by appointing CEO Erik Bertman, bringing years of experience from Microsoft, Nokia and Ericsson, and CFO Jacob Christensen, who previously held the same position at ISS in Sweden. During his first year as CEO, Erik and his management team have executed on a set of initiatives, including unlocking the full potential of the service business. This initiative is benefitting from a fast-paced outsourcing trend and Coromatic’s vast Nordic service network in an otherwise highly fragmented market. Further, Coromatic has successfully transitioned its solutions business towards high growth verticals, which benefit from the cloud transition, such as colocation providers. Moreover, the company is harvesting an increased degree of repeat-like solutions from its extensive installed base.
The new strategy has already generated strong results. In 2018, Coromatic doubled its exposure in the solutions business to high growth third party data centers, which now constitute over half of its data center business, and at the same time grew services revenues in line with its 10-year services growth rate at around 15%. Overall, this translated into a 10% revenue growth at 11% EBITDA margins. Finally, Coromatic increased its market leading customer and employee satisfaction scores.
Erik Bertman, CEO at Coromatic, commented: “We see a large and increasing demand for our services and solutions, as the market grows more aware of the significant costs associated with power outages. Coromatic will continue to serve as a trusted partner to our customers, ensuring continuous operations through our technical capabilities and extensive service network, available 24/7. As power outages continue to increase in frequency, we provide an insurance against the associated commercial, financial and reputational risks.”
Victor Englesson, Partner at EQT Partners, added: “We are impressed by Coromatic’s journey towards becoming the leading Nordic critical facility services and solutions provider and the strong results achieved by the management team. Based on structural market drivers and a unique market position, Coromatic continues to enjoy very strong growth prospects, while playing a critical role to society and businesses. EQT is proud to be part of this journey.”
During EQT’s ownership, Coromatic has more than doubled its revenues, which now stand at more than SEK 1,500 million (EUR 142 million). In a highly fragmented Nordic market, EQT has supported an ambitious consolidation strategy where Coromatic has executed eight add-on acquisitions. Today, Coromatic has around 500 employees operating out of 17 locations and serving more than 5,000 customers, including around 60% of the Nordic’s top 100 companies. Of these customers, 3,800 are serviced routinely by Coromatic’s 220 service technicians, which represent the most extensive pan-Nordic critical facilities service.