Episode 136 · 2022-05-07 · 44:29 · Original in Finnish
Northern IPOs: Norrhydro and LapWall | Yrjö Trög and Jarmo Pekkarinen | Negotiator 136
Originally published as “Pohjoisen listautujat Norrhydro LapWall | Yrjö Trög Jarmo Pekkarinen | Neuvottelija 136”
Two Northern Finnish First North listings at the same table, six months after the offering. Yrjö Trög of Norrhydro and Jarmo Pekkarinen of LapWall explain how the price was set through anchor investors, why anchors were over-collected as insurance, and how scaling and the over-allotment option worked in practice: Norrhydro's 8 million euro offering drew 56 million in subscriptions and LapWall's was 8.8 times oversubscribed. Also here: NorrDigi's promise for the electrification of hydraulics, LapWall's LEKO system and its 70 per cent share of warm roof elements, a failed export push into Sweden, and why construction is fifty years behind other industries.
Core theses
- The anchor investor meetings, not the roadshow, decided both offerings — the price was effectively set before the retail book opened.
- Over-collecting anchors is insurance against the book failing, and it is paid for in scaling that annoys everyone who subscribed.
- An electric motor does not replace hydraulics; NorrDigi's claim is about making the hydraulics electric, which is a different and narrower proposition.
- Construction lags other industries by decades because its products are not standard, and factory production requires standard products before it requires automation.
Watch and listen
Key moments
- 00:00 — The guests, Yrjö Trög and Jarmo Pekkarinen, introduce themselves
- 00:53 — What Norrhydro does in Rovaniemi
- 01:46 — Hydraulic cylinders, and NorrDigi's future value
- 02:50 — LapWall, and the trademark fight over the LEKO name
- 03:20 — Timber elements, and construction moving into factories
- 04:02 — What sizes the elements and the cylinders come in
- 05:02 — How the share price has moved since listing
- 06:10 — Anchor investors and pricing the offering
- 07:12 — Scaling back, the over-allotment option and an 8.8 times oversubscription
- 08:11 — People's shares, and thousands of new owners
- 08:39 — Where the name LapWall came from
- 09:27 — Pyhäntä, and the listed companies of Northern Finland
- 09:56 — Why the new factory stayed in Rovaniemi
- 10:53 — The small-town philosophy in the engineering industry
- 11:31 — LapWall's acquisitions in Pälkäne and Veteli
- 13:17 — A 70 per cent market share in warm roof elements
- 14:14 — Walls and roofs weatherproofed by a single supplier
- 14:48 — Airports and Wärtsilä as references
- 15:32 — The Motiomax deal and Norrhydro's acquisition strategy
- 16:44 — Norrhydro's customer segments, and NorrDigi's role
- 17:45 — Why an electric motor does not replace hydraulics
- 19:31 — Electrification and NorrDigi's market potential
- 20:06 — The long design cycles of machine builders
- 20:35 — LapWall's Swedish expedition, and what it taught
- 22:37 — Export readiness, and the size of the Finnish market
- 23:23 — Culture eats strategy for breakfast
- 23:33 — Experiences in Korea, and the Asian market
- 24:49 — The Rovaniemi factory serves Europe
- 25:17 — Exporting through Finnish customer relationships
- 25:45 — Fragmentation in construction, and the dishonest operators
- 26:15 — A Ponsse background, and Einari's book
- 26:49 — Entrepreneurship and the stock exchange together
- 27:14 — Norrhydro is looking for a new chief executive
- 27:50 — LapWall's ownership base, and professional management
- 28:51 — A target of 70 million in revenue by 2026
- 29:17 — The modular experiment, and why the world was not ready
- 30:46 — Construction is fifty years behind other industries
- 31:17 — Standard products as the precondition for factory production
- 31:47 — Offering proceeds going into digital technology and automation
- 32:07 — House factories against a product industry company
- 33:35 — What the prototype did to production volume
- 33:54 — Customer tailoring, and outsourcing by machine builders
- 35:07 — A complete system with intelligence in it, at five times the price
- 36:28 — Automation in the new factory, and lean flow
- 37:30 — Flexibility in mixed-series production
- 38:38 — What they would do differently in the listing
- 39:22 — Unnecessary documentation, and digital marketing
- 40:07 — The anchor investor meetings decided the offering
- 40:58 — LapWall's offering in a falling market
- 42:07 — Thirty per cent of the staff are shareholders
- 42:33 — The cost of listing, and the missing concept
- 43:17 — The nerve to press the button in an uncertain world
- 43:49 — Closing words and thanks
Summary
Two Northern Finnish First North listings at the same table, six months after the offering. Yrjö Trög of Norrhydro and Jarmo Pekkarinen of LapWall explain how the price was set through anchor investors, why anchors were over-collected as insurance, and how scaling and the over-allotment option worked in practice: Norrhydro’s 8 million euro offering drew 56 million in subscriptions and LapWall’s was 8.8 times oversubscribed. Also here: NorrDigi’s promise for the electrification of hydraulics, LapWall’s LEKO system and its 70 per cent share of warm roof elements, a failed export push into Sweden, and why construction is fifty years behind other industries.
The book was closed before it opened
Both offerings were effectively priced in the anchor investor meetings. By the time the public book opened, the number that mattered had been agreed with a handful of institutions — which is why an 8.8 times oversubscription tells you about demand at a price someone else set, not about what the market would have paid.
Insurance you pay for in scaling
Collecting more anchors than the offering needs protects against the book falling short. The cost lands on everyone who subscribed and got a fraction, and the guests are candid that the trade was made deliberately rather than as an accident of demand.
Standard products come first
The claim that construction trails other industries by fifty years gets a specific explanation here: factory production requires a standard product, and construction sells bespoke ones. Automation is downstream of that, which is why buying machinery has not closed the gap for anyone.
Watch
The recording lives on the Neuvottelija channel: Pohjoisen listautujat Norrhydro LapWall | Yrjö Trög Jarmo Pekkarinen | Neuvottelija 136. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Yrjö Trög, Jarmo Pekkarinen
Topics: Investing & Markets Ownership, Capital & Tax M&A & Exits