Crem International

Under Priveq’s ownership, Crem International went from being a producer of coffee machines to a comprehensive supplier of coffee solutions to hotel, restaurant, office and other professional customers in the European and Asian markets. The company grew by over 80% during the investment period – all the time with high profitability.

Market leader growing with global market drivers
In 2012 Crem International was already a market leader in their home markets of Sweden and Spain. Moreover, the company had successfully established production in China, which allowed a flexible production model with a foothold in three countries. The company was formed following a merger  between the Spanish company Crem Aparatos and the Swedish company Coffee Queen. With their sights set on being a comprehensive supplier of professional coffee machines, they wished to find a growth partner that could take the operation to the next level. That’s when Priveq came into the picture.

“We saw a unique opportunity to lift the company from an entrepreneurial-led to a management-led company. We wanted to professionalize the company’s processes and products, and develop together with them,” explains Maria Perez Hultström, Partner and Investment Manager at Priveq.

Together with two strong founding families and SEB Venture, Priveq invested in Crem International, which was acquired from Accent Equity Partners. However, the entrepreneurs remained as important shareholders in the company.

Strengthened processes at all levels
Under the leadership of a strong management team, the company was put together from two separate entities into an integrated company with three production sites and one leading product development. The company’s customer base was expanded to include operators, roasteries, distributors and wholesalers, and included coffee machines for espresso, filter and instant coffee. Large investments were made in development of new coffee machines in order to meet customers’ diverse needs and still maintain a scalable production platform,” explains Maria.

“We were an active partner and helped them with many aspects of the operation. Everything from drawing up a business plan for how the company would be marketed, product development and production, to financial matters such as various loan arrangements and advice on the output flows in the factories. I believe and hope that Crem experienced strong support from us.”

The sales organization was also strengthened, in order to offer customers a wider selection of products in several geographical markets. Germany, Netherlands, Great Britain and China grew to become major markets. The company rapidly established sales in over 80 countries and a global sales organization. Trends such as out-of-home coffee – that is to say consumption of coffee outside the home, a strong trend for better quality coffee and increasing consumption of coffee in Asia, were powerful spurs for successful company development.

Strategic additional acquisition of technology and relocation of production
In 2015 Crem International bought the German company Spengler from Maas International. The acquisition of the division was an important piece of the technical puzzle in becoming a comprehensive supplier of fully automated espresso machines, something that Crem had previously been missing. This also expanded the company’s geographical distribution. After the acquisition, the production of Spengler’s products was moved from Germany to Åmotfors, Sweden, which led to lower production costs and increased efficiency in the organization. The additional acquisition meant that Crem International’s product portfolio was complete, and positioned the company as an acquisition candidate for a number of industrial players active in professional machines within HoReCa, Office and Convenience.

With a complete product portfolio, the company’s development could be focused on IoT and connectivity, as strong trends for growth. The aftermarket for service and spare parts grew at the same time, and with an increased demand for data on usage, and opportunities to optimize service, possibilities opened up for new partnerships together with the main customers.

Substantial buying interest among several players
After the successful acquisition, and the transition from an entrepreneurial company to a company with strong structural capital, and development driven by market trends, Crem was ready for sale. The success was based on the strong foundation and structure that the company had created at all stages, from product development and production, to sales organization and management team, whilst managing to maintain their entrepreneurial spirit in running the business.

Crem International was well suited to several industrial players which led to substantial interest from industrial as well as financial buyers. The company had then grown from sales of SEK 446 million in 2012 to SEK 770 million in 2017. Following discussions with many interested parties, it was American Welbilt that bought Crem International, and Priveq left the company in the spring of 2018.

“Crem complemented Welbilt’s product portfolio well and expanded their geographical presence both in terms of production and sales. The synergies that you get when you can be a comprehensive supplier is invaluable,” explains Maria and Karl-Johan Willén, Partners and Investment Managers at Priveq, agrees.

“We are convinced that Welbilt, as an international company within food service equipment, will continue to expand Crem International as a globally leading supplier in all sectors.”