Finnish sauna giant Harvia, which its on The Armchair Trader’s watch list at the moment, has bought the “Porsche” of the sauna brands, EOS Group. Harvia’s global market share will be now 14%, up from 11%.
“The acquisition is perfectly in line with our strategy and supports our aim of increasing the value of average purchase, geographical expansion and improving our productivity,” said Tapio Pajuharju, CEO of Harvia. “It is also a natural step for Harvia in becoming the leading one-stop-shop in global sauna markets while strengthening especially our spa offering.”
Sauna leader Harvia is weathering the coronavirus storm
Harvia shares are only down -14.07% YTD, a lot better than many blue chips. Since the EOS acquisition on 17 March, Harvia shares are up, from €7.16 to €8.98 March 31st. At the time of writing, Harvia stock was priced at €8.80. The Armchair Trader originally tipped Harvia on 9 March, since which time shares are up 12.8% in very tough markets.
Harvia’s balance sheet and financial position are considered to be strong. The company told analysts last week that after a thorough financial and risk analysis, it had concluded that now is the right time to carry out the transaction, despite the global coronavirus situation.
Indeed, in Nordic countries, governments have been stressing the value of saunas, both as a treatment for some of the effects of COVID-19, but also to disinfect the clothes and luggage of citizens who have returned from abroad.
EOS Group acquisition will increase market share
The acquisition of EOS Group offers Harvia the opportunity to grow its market share, especially in the professional and premium sauna and spa solutions.
On top of this, the acquisition supports Harvia’s profitability. It could create a clear synergy of benefits as the product portfolios of Harvia and EOS complement each other well. Both brands will continue as independent brands, Harvia confirmed. With its current distribution network, there could be good opportunities to expand the distribution of EOS products to new markets as well.
Both Harvia and EOS Group are strong companies in their own segments and the professional and premium sauna and spa solutions offerings complement each other well. The financial position of EOS is strong, and the company is debt-free. During the past years, EOS has worked hard to develop its manufacturing, procurement and supply processes.
EOS specialises in the luxury spa and hotel market
The acquisition of a majority stake in EOS is a logical step in Harvia’s strategy implementation and clearly complements Harvia’s professional and premium sauna and spa solutions offering.
EOS products are typically used in luxury spas, wellness hotels, fitness clubs and in the premium price range sauna and spa projects of private individuals. The company has a strong distribution network and its loyal customer base consists of renowned European sauna and steam room manufacturers. The distribution network of EOS covers more than 80 countries, and the group is in a leading position in Germany, Austria, Russia and the CIS countries.
The key brands of EOS include EOS sauna heaters and steam generators, Kusatek gas-powered sauna heaters, and Spatronic control units and electronics. All EOS products are developed and manufactured in the company’s modern production plant in Driedorf, Germany.