Fasadgruppen Group (FG) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Clear Line establishes entry into the UK, expanding beyond the Nordics into a GBP 10.5 billion and growing facade and cladding remediation market driven by regulatory and safety needs.

• Clear Line specializes in complex facade fire remediation, offering full-service solutions, a skilled workforce, and a strong, recurring customer base, complementing the acquirer's portfolio.

• The fragmented UK market and regulatory changes create opportunities for scale, consolidation, and value creation, aligning with the acquirer's decentralized model.

• Clear Line's management sought a larger partner to enable further growth and project scale, aligning with the acquirer's M&A strategy.

• Clear Line's established customer base, experienced management, and IT-driven project management are expected to enhance group capabilities and stable revenue streams.

Financial terms and conditions

• Total consideration is GBP 119.9 million, comprising GBP 51.1m cash, GBP 15.3m vendor/loan notes convertible into shares, and GBP 53.4m in performance-based preference shares.

• Cash portion is funded under a SEK 2,700m (GBP 48.4m) credit facility with new and existing loans from Nordea, SEB, and Svensk Exportkredit.

• Loan notes will be converted to shares at a price based on the volume-weighted average share price, with an estimated dilution of 9.3% for existing shareholders.

• Preference shares entitle sellers to dividends based on Clear Line's net profits through 2028, with options for both parties to buy/sell shares at values tied to future earnings.

• The deal values Clear Line at a 3.1x multiple of adjusted EBITDA/EBITA (LTM/R12 as of June 2024).

Synergies and expected cost savings

• Material procurement, project management, and IT structure synergies are anticipated, enhancing efficiency and purchasing power.

• Combined operations are expected to drive operational efficiencies and enable further value-adding acquisitions.