Russian assets of the Finnish elevator manufacturer Kone transferred to S8 Capital
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Finnish elevator manufacturer Kone, which planned to transfer its Russian division to local management, has found a third-party buyer. This business is estimated at 0.5–1 billion rubles. acquired by the Russian company S8 Capital. The deal will allow the buyer, in particular, to expand the service portfolio of Meteor Lift, created on the basis of the previously purchased Russian business of the American Otis. Servicing equipment can be more profitable than producing it, although managers are not always satisfied with the work of the successors of Western companies.
S8 Capital bought out JSC Lift Connect, on whose balance sheet are the Russian assets of the Finnish Kone, Kommersant was told in the company itself. We are talking about a service portfolio that includes 7 thousand pieces of equipment, including high-speed elevators in six regions. The company employs 300 specialists, who will retain their jobs by moving to Meteor Lift. Kone equipment will be serviced under this brand. The Finnish office of Kone did not answer Kommersant’s questions.
S8 Capital does not disclose the transaction amount. NEO senior manager Tatyana Pushkova estimates the market value of Lift Connect at 0.5–1 billion rubles.
Armen Sargsyan is considered the owner of S8 Capital. The holding owns, in particular, Stoloto, a lottery distributor, the Price.ru marketplace, the Strakhovka.ru aggregator, and the Sport24 publication. Since 2022, S8 Capital began acquiring assets of foreign players leaving Russia. This spring, S8 Capital agreed to buy out the business of the German tire manufacturer Continental (see Kommersant, May 30). Last year, the assets of the American elevator manufacturer Otis came under his control (see Kommersant, July 27, 2022). Since January 2023, the company began producing elevators under the Meteor Lift brand.
Finnish Kone has been supplying elevators to the USSR since the mid-1930s, and last year decided to leave Russia, transferring the local business to local management. But as of March 2023, Lift Connect was still a subsidiary of Kone, as follows from the reporting of the Russian company. The company’s revenue for 2022 amounted to 4.2 billion rubles.
Kone equipment is installed mainly in luxury housing, offices, stadiums and infrastructure facilities. Tatyana Pushkova adds that Lift Connect is also the exclusive distributor of elevator equipment from G.Loong, one of the leaders in the Chinese market. One of Kommersant’s market interlocutors calls exports from China a key area for the development of S8’s elevator business.
The total service portfolio of Meteor Lift after the acquisition of Lift Connect will amount to 51.3 thousand elevators, escalators, travelators and turnstiles. The deal, according to S8 Capital Managing Director Thorsten Schubert, will allow the company to become the leading service provider in terms of the number of high-speed elevators serviced in Russia.
Kommersant’s interlocutor in the elevator equipment market calls maintenance a profitable business: “Installing an elevator can cost one and a half times more than the equipment itself.” General Director of A101-Comfort Igor Vdovichenko notes a decline in the quality of service provided by successor companies of foreign manufacturers. “The lack of external control has affected compliance with service standards and their unreasonable changes,” he adds.
The departure of foreign elevator manufacturers has become painful for Russian developers. Asterus explains that some spare parts are still unavailable on the market, and some are sold at inflated prices; delivery times have increased from one week to 14–20 days. Operations Director of MD Facility Management Boris Mezentsev says that the price of elevators will rise by 30–40% due to logistics costs, since spare parts are supplied as part of parallel imports.
Manufacturers from China and Turkey have begun to supply their products to the Russian market, but they do not always suit developers. “One of the requirements for elevators in high-rise buildings is a lifting speed of at least 2 m per second; Turkish companies have a maximum rate of 1.6 m per second,” says Alexey Solodovnikov, director of the Glincom construction department. Russian elevators, he said, can also often rise no higher than 30–35 floors. According to Mr. Vdovichenko, it is too early to talk about the quality of service for elevators from Russia, Belarus, Turkey and China.
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