Ependion (EPEN) M&A Announcement summary

Deal rationale and strategic fit

• The acquisition strengthens the position in the energy sector and edge computing, targeting large customers in energy and manufacturing industries, and aligns with global trends in electrification and renewable energy.

• Welotec brings over 10 years of experience in substation automation for critical energy infrastructure and rugged environments.

• Welotec's established presence in energy and industrial automation complements existing offerings, enabling cross-selling and broader customer reach.

• Cultural and operational fit identified early in discussions, supporting smooth integration.

• The deal supports expansion into new markets and technologies, enhancing diversification and market penetration.

Financial terms and conditions

• Acquisition of all shares in Welotec for an initial cash consideration of EUR 35.2 million, cash and debt-free, with a performance-based earn-out capped at EUR 14.8 million based on 2025-2026 results, for a total transaction capped at EUR 50 million.

• Welotec reported EUR 24 million turnover and 13.4% EBIT margin in the last year.

• No significant debt in Welotec at acquisition.

• The acquisition is expected to be accretive to earnings per share from completion, excluding non-cash amortizations.

• Completion is expected in Q2 2025, subject to customary conditions.

Synergies and expected cost savings

• Significant sales synergies are anticipated by combining Welotec's and Westermo's offerings and leveraging global sales channels.

• Potential to replace third-party products with in-house solutions, leveraging overlapping offerings.

• Welotec will serve as Westermo's technology center for Edge Computing, supporting innovation and cross-selling opportunities.