Harvia Acquires Majority Stake in Germany's EOS Group

Harvia Plc announced on 18 March 2020 that it has signed an agreement to acquire a majority stake in EOS Group, the Driedorf, Germany-based premium sauna heater and spa controls manufacturer. The purchase price is EUR 19.7 million, based on a debt-free EOS Group valuation of EUR 25.5 million at signing. The deal represents Harvia's largest acquisition since its 2018 IPO and gives the Finnish company a decisive foothold in the commercial and ultra-premium residential sauna segment. Full M&A history, brand portfolio, and investor calendar in our Harvia News hub.

What EOS Brings

EOS Group traces its founding to 1944 in Germany, when Willi Gunther started the company. Key milestones: start of sauna heater production in 1973; acquisition of the Kern Group (professional-market focus) in 1989; acquisition by Paragon Partners and renaming to EOS Saunatechnik GmbH in 2011; management buyout by Michael Meis and Rainer Kunz in 2013; acquisition of Neutron Geratetechnik GmbH (Spatronic electronics) and Kusatek GmbH (gas-fired heaters) in 2015. By 2020, EOS was the leading global premium sauna technology company with 75 years of history.

EOS is recognized across Europe and hospitality as one of the premier manufacturers of commercial sauna heaters, infrared technology, and spa control systems. Products feature in hotel spas, medical wellness clinics, and public bathing facilities across German-speaking Europe. The EOS product portfolio spans premium sauna heaters (including the S-line), "underbench" and "behindbench" hidden-installation heaters, sauna control units, steam generators, infrared hardware, colored light systems, sauna control apps, Kusatek gas-fired heaters (the only relevant gas-fired premium sauna heater producer globally), and Spatronic software-and-hardware control unit systems. All EOS products are developed and manufactured in Driedorf, Germany.

Market Positions After the Deal

Post-transaction, EOS delivered Harvia the number-one premium sauna heater producer position worldwide, the number-one and only relevant gas-fired premium sauna heater producer globally, and leading premium positions in Germany (estimated 60% of premium segment), Austria, Russia, and the CIS countries. Combined Harvia plus EOS market share in the global sauna heater and component market rose from Harvia's pre-deal estimated 11% to 14%. EOS distribution covered more than 80 countries at time of deal.

EOS Key Financials

EOS Group key financials (pre-acquisition, pro forma, EUR million):
2017: Revenue 17.2 / Adj. EBITDA 2.4 (13.8% margin) / Adj. EBIT 2.0 (12.1%)
2018: Revenue 17.5 (+2.1%) / Adj. EBITDA 3.0 (17.3%) / Adj. EBIT 2.7 (15.5%)
2019: Revenue 17.3 (-1.5%) / Adj. EBITDA 3.2 (18.5%) / Adj. EBIT 2.8 (16.5%)
EOS 2019 revenue by geography: Germany 37%, other European countries 37%, Russia 23%, other 3%. Revenue by product group: sauna technology 60%, control units 15%, other 25%. Employees: approximately 150. Total assets at end of 2019: EUR 10.8 million. Net debt: EUR 1.3 million.

Harvia's 2019 standalone revenue was EUR 74.1 million (+19.6% YoY) with adjusted EBITDA of EUR 17.0 million (22.9%) and adjusted EBIT of EUR 13.9 million (18.7%). Harvia 2019 revenue by geography: Finland 33%, other European countries 23%, North America 16%, Germany 9%, Russia 8%, other Scandinavia 6%, other countries 6%. By product: sauna heaters 54%, sauna rooms 20%, accessories and services 13%, control units 8%, steam generators 5%.

Transaction Structure

Harvia acquired 78.6% of Kunz & Meis Holding GmbH (the German holding company) and 80.0% of OOO EOS-Premium Spa (the Russian operative entity). Rainer Kunz retained 21.4% minority in Kunz & Meis Holding GmbH, and Vasilij Sosenkov retained 20.0% in the Russian entity. Sellers held put options to sell remaining shares after certain conditions; Harvia held an option to purchase minority shares within 8 years. The transaction also covered the real estate property purchased from M. & K. Immobilien GbR used by EOS. Harvia acquired the remaining 21.4% EOS German minority in July 2022, completing full ownership.

The total purchase price of EUR 19.7 million was financed with a new long-term facility of EUR 20.0 million. Harvia's net debt rose from EUR 28.3 million at the end of 2019 to EUR 49.6 million after the deal, and long-term liabilities from EUR 38.7 million to EUR 61.1 million. Harvia's equity ratio adjusted to 46.0% (from 56.6%).

Synergies and Integration

Harvia projected annual synergies of at least EUR 2.2 million, to be fully realized by 2024. Identified synergy sources included cross-selling opportunities, streamlined product offering, economies of scale in sourcing, optimization of warehousing and logistics, and alignment of sales organization. One-off integration and post-closing costs of EUR 1.4 million were expected over 2020-2021. Illustrative combined Harvia revenue for 2019 pro forma was EUR 91.6 million with adjusted EBITDA of EUR 20.2 million.

Harvia is proud to announce the acquisition of a majority stake in EOS Group, the world's leading professional and premium sauna and spa solution manufacturer. 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.

The above quote is from Tapio Pajuharju, CEO of Harvia at the time of the transaction. Pajuharju continued: "Harvia's balance sheet and financial position are strong. After a thorough financial and risk analysis, we concluded that now is the right time to carry out this transaction, despite the global coronavirus situation." The deal closed in March-April 2020.

Rainer Kunz, then-and-now Managing Director of EOS Group, added: "I'm very satisfied with this transaction. Both Harvia and EOS Group are strong companies in their own segments and our professional and premium sauna and spa solutions offerings complement each other well. The financial position of EOS is strong, and we are debt-free."

Deal snapshot: Target: EOS Group (Driedorf, Germany; Russian subsidiary). Acquirer: Harvia Plc. Announced: 18 March 2020. Closing: March-April 2020. Purchase price: EUR 19.7 million (78.6% of German operations, 80% of Russian operations). Debt-free valuation: EUR 25.5 million. EOS 2019 revenue: EUR 17.3 million. Employees: ~150. Synergies: EUR 2.2M annual by 2024. Minority roll-over: Rainer Kunz (German 21.4%), Vasilij Sosenkov (Russian 20%). Harvia completed full German EOS ownership in July 2022. EOS Driedorf factory makes all EOS heaters, Kusatek gas heaters, Spatronic controls.

Why It Matters

KLAFS, the other major German premium sauna player, remained privately held in 2020 and was later acquired by Kohler in 2023. EOS's combination with Harvia created the only publicly traded sauna manufacturer with genuine depth in the commercial and premium residential categories. The deal also gave Harvia a German manufacturing base, a hedge against any future EU-UK or EU-US trade friction that might complicate Finnish-only production. It also added the only relevant gas-fired premium sauna heater producer in the world to the Harvia portfolio. Harvia advised by Aventum Partners (financial), Borenius Attorneys and Noerr LLP (legal), Hill+Knowlton Strategies (communications).

Harvia just bought the one brand that could have been an independent consolidator itself. With EOS in the fold, alongside Almost Heaven and the core Harvia business, the Finnish group now controls an outsized share of the European sauna heater stack, has manufacturing in three countries, and is positioned to compete for the largest hospitality installs in the world. EOS is the only gas-fired premium heater producer globally, which alone makes the deal strategically unique.