Rollups From Hell Vol.1 - Storskogen: the arsonist in Sweden’s Holy HoldCo Forest

Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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Ornäs birch is Sweden’s national tree. It grows on average by 30-50 cm (1-1.5 feet) per year - meaning it takes 30-40 years to reach the maximum height. Way too slow for Storskogen - Swedish for “large forest” - an industry-agnostic serial acquirer founded in 2012 by Daniel Kaplan (the CEO), Alexander Bjärgård (Head of M&A) and Ronnie Bergström. 

By the time Storskogen turned 10, it had completed 200 (!) acquisitions and gone public at a $7B+ valuation. 

And then it all went downhill:

Investors deserted the stock as Storskogen’s net debt and cash flow headed in opposite directions. Having previously bought companies at the pace of one every week, Storskogen was now a forced seller. In 2024, Mr. Kaplan moved on, subsequently founding a new serial acquirer, Evity.  

Sidenote: do you know who else was closing 1 deal / week during COVID? Thrasio! 

But let’s back up. 

The phrase “Swedish serial acquirer” conjures the image of an unhurried, diligent compounder - but don't be fooled by the figureheads like Lifco and Indutrade. In a stock market as diverse as Sweden’s, there are bound to be flameouts in every category, including HoldCos. Names like Instalco and Vestum pop to mind. 

Storskogen’s megalomania is on a whole different level though. 

Between 2017 and 2021, Storskogen grew revenues 10x (from SEK 1.7B to 17B). In 2022, it doubled revenue again, after closing 54 acquisitions, bringing the cumulative total to 206. 

Note: here and elsewhere, we present Storskogen financials in Swedish Krone. The SEK/USD exchange rate is approx. 9.4, having ranged from 8.1 to 11.4 over the last decade. 

Now, Storskogen is very far from a basket base. Its stock may be languishing three-quarters below the IPO price, but it is a profitable conglomerate that has gone to great lengths to de-lever and to clean up the portfolio. At the same time, given how severely the Storskogen brand is tarnished by past excesses, its history holds important lessons for serial acquirers chasing growth. So far-reaching was the fallout that the 2025 IPO of Röko, another fast-growing serial acquirer, was largely snubbed by Swedish institutional investors.   

Walking away from a $6M/y job to build a $600M+ revenue HoldCo. Our take on Röko, Sweden's newest unicorn

OK, let’s figure out what exactly went wrong! 

1. Loading up on cash

The history of Storskogen can be divided into two distinct stages. 

Pre 2017, Storskogen was a diligent, if boring, acquirer of industrial companies used to paying sub 3x EBITA. 

Then, everything changed. 

According to the IPO prospectus, “In 2017 Storskogen changed its capital strategy, carrying out larger share issues in order to finance several acquisitions and to enable faster M&A processes”. 

It was about time! Sweden’s benchmark interest rate had been negative since 2014. In early 2016, the rates were cut further, to a low of -0.5%. In this era of loose money, Storskogen’s net debt began to ramp up, growing from an average of c.3x of operating cash flow in 2019-21 to 9x in 2022. 

Then came the IPO. 

In October 2021, Storskogen raised SEK 13B at a pre-money valuation of SEK 56B / post-money SEK 62B ($7.2B based on the prevailing exchange rate). 

The share popped 30% on the first day of trading. It didn't matter that over half of the shares offered were secondary (source), and that key 4 executives (Kaplan, Bjärgård, Bergström and Ahlgren - the longtime Head of BU Services) cashed out almost SEK 6B (source: IPO prospectus).

Who else pocketed a windfall? Storskogen’s pre-IPO investors! In the first 9 months of 2021, Storskogen had carried out no fewer than 14 share issues, raising SEK 4B in total. These pre-IPO raises were done at prices ranging from SEK 12.50 to 25 - a steep discount to the IPO price of SEK 38.50: a whopping ~3x sales and ~30x EBITA, on a forward basis.   

Now, Storskogen had cash to burn and investor expectations to fulfill…

2. What did Storskogen actually acquire?

In the serial acquirer world, a well trodden path to oblivion consists of:

1. First, issuing a lot of expensive equity. 

2. Then, topping up with a lot of debt. 

3. Then, embarking on a buying frenzy and making lots of expensive, mediocre acquisitions

By now, you know how Storskogen accomplished steps #1 and #2. What about #3? 

Storskogen’s M&A playbook is best illustrated by the following screenshot (source). If you squint, you can spot gems like:

• A whole-portfolio acquisition from the private equity firm Ceder Capital (inside: 2x HVACs, a “people counting solution”, a vendor to the packaging industry; a property management VMS); 

• A second whole-portfolio acquisition: a Swiss industrial HoldCo called Artum 

• Vikingsun - a distributor of Japanese knives and other kitchenware

2022 brought more “great” deals, like this acquisition of a Norwegian hair salon chain. But hey, 10% EBITA margin! 

The problem was that to sustain this frenetic pace of M&A, Storskogen had to pay up. 

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