Sweden-based machinery components distributor OEM International AB confirmed on Nov. 5 that it has received a public takeover offer from private equity firm EQT AB for $1.4 billion.

The offer represents a 12.3% discount of OEM International’s Nasdaq Stockholm closing share price on Nov. 4, and a 6.6% discount of the share price’s volume-weighted average trading price for the 30 days prior to Nov. 5.

The acceptance period of the offer is expected to begin on approximately Dec. 19 and expire on/around Feb. 27, 2025, subject to any extensions.

“We are very impressed with OEM International’s history and its position as a trusted distributor of industrial components – a success made possible by the entrepreneurial spirit and outstanding efforts of the entire team at OEM International over the past decades,” an EQT partner and investment advisor said in a statement about the offer. “As an active owner, we see the potential to unlock additional value in OEM International and will leverage our industrial network and resources to increase the pace of acquisition in both existing and new markets, while also driving select organic strategic growth initiatives.”

OEM International said that EQT has secured sufficient shareholder votes — 72.5% — to take control of the distributor. A company statement noted that OEM’s four largest shareholders agreed to sell approximately three quarters of their holdings to EQT.

According to Swedish law, if EQT secures 90% of shareholder votes, it can delist OEM by forcing the remaining shareholders to sell their stock. Anything below 90% may leave the private equity firm as a majority owner in a listed entity.

OEM’s website states that it has a portfolio of more than 60,000 products from over 400 suppliers and that it has 34 operating business units in 15 countries across Northern Europe, East Central Europe, the British Isles and China. Its top product areas are within: 

• Electrical components
• Machinery components & cables
• Pressure and flow components
• Motors, ball bearings & breaks
• Appliance components; and
• Installation components

The majority of OEM International’s customers are original equipment manufacturers in various industries, all making different machinery and equipment using constituent components from subcontractors. 

OEM’s sales have grown from $307 million in 2020 to $481 billion in 2023, with its EBITA margin likewise going from 12.9% in 2020 to 15.8% in 2023.