Baylin Technologies (BYL) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Kaelus aligns with the growth engine in infrastructure, expanding product, customer, and geographic diversity, and advances strategy for sustainable growth and RF portfolio diversification.

• Kaelus brings complementary technologies and customers, enhancing wireless infrastructure and embedded antenna business units, with minimal overlap and enabling cross-selling and upselling.

• Expands global scale and customer base, positioning the combined entity as a leader in RF solutions and a more comprehensive supplier, enhancing competitiveness.

• Kaelus’s leadership team will remain, ensuring continuity and value growth.

• Kaelus's established presence in Europe and other regions opens new markets for existing products.

Financial terms and conditions

• Transaction valued at CAD 42 million (SEK 285 million), structured as 50% cash, 36.5% stock, and 13.5% deferred cash payment, with about 52.2 million shares issued under lock-up agreements for 9–24 months.

• Equity raise of CAD 10 million led by Paradigm Capital to fund the deal, with strong support from the chairman, Canadian investors, and new institutional investors.

• New debt financing of CAD 30.9 million arranged, retiring existing RBC debt and targeting a sub-2.3 leverage ratio.

• Kaelus acquired at 4.7x 2024/2025 adjusted EBITDA, considered a favorable multiple given backlog and pipeline.

• Purchase price paid in cash and common shares, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• Significant cross-selling opportunities identified, especially in RF conditioning and antenna products, with highly complementary portfolios expected to drive cost synergies and margin expansion.

• Immediate margin expansion expected through tariff mitigation strategies and operational synergies.

• Combined backlog at Q3 2025 totals $51.2 million, indicating strong future revenue.

• Synergies are not included in 2026 projections, providing upside potential.

• Strategic plan developed to drive growth, product development, and operational best practices.