(RATO-B) Ratos (publ) - Ratings and Ratios

Ratos AB (publ) is a seasoned private equity player with a sharp focus on value creation. Since 1933, the firm has been navigating the Nordic markets with a disciplined approach, targeting medium-sized companies in need of transformation. Their sweet spot is the middle market, where they can apply their operational expertise to unlock growth and profitability.

Their investment strategy is clear-cut. Ratos avoids early-stage ventures and sectors like arms, pornography, and environmental harm. Instead, they zero in on industries, construction, services, consumer goods, and technology. Geographically, they’re anchored in the Nordic region, with Sweden, Finland, Denmark, and Norway being their primary hunting grounds. They look for companies with equity needs between SEK250M and SEK5B, sales ranging from SEK300M to SEK5B, and EBITDA exceeding SEK50M. They’re flexible on ownership stakes but prefer to hold at least 20% and secure a board seat to drive decisions.

Financially, Ratos commands a market cap of around 11.6B SEK, with a P/E ratio of 11.97 and a forward P/E of 9.03, signaling expectations of future growth. The P/B ratio of 0.93 suggests the market values the company slightly below its book value, potentially indicating undervaluation. The P/S ratio of 0.36 reflects modest revenue multiples relative to peers.

ESG considerations are woven into their DNA. They actively avoid sectors detrimental to the environment and focus on sustainable value creation. This aligns with the growing demand for responsible investing without sacrificing financial returns. For investors seeking exposure to the Nordic middle market with a proven, long-term track record, Ratos offers a compelling proposition.