ITAB Group (ITAB) M&A Announcement summary

Deal rationale and strategic fit

• The acquisition merges two industry leaders with complementary geographic footprints and customer bases, aiming to double the size of the combined entity and strengthen its market position in Europe and beyond.

• Accelerates expansion into key markets, especially in Western and Southern Europe, the Middle East, and South America, leveraging both companies' strengths.

• Enhances cross-selling opportunities through differentiated offerings in Retail Technology, Lighting, and Brand & Retail segments.

• Both companies share a similar culture and entrepreneurial spirit, supporting successful integration and value creation for customers and employees.

• The deal is driven by the need for scale to meet increasing demands in data, technology, environmental reporting, and industry consolidation.

Financial terms and conditions

• The cash bid for the acquisition is EUR 320 million on a debt-free basis, corresponding to a 6.4x 2023 Adjusted EBITDA multiple before synergies, and 4x after synergies.

• Financed by EUR 255 million in new long-term debt and a SEK 850 million directed share issue, with strong investor interest and broadened ownership.

• Share issue includes 38.2 million new shares at SEK 22.7 per share, raising SEK 867 million before costs.

• Debt is provided by Nordea, Swedbank, and Danske Bank, with terms in line with historical credit lines and covenants designed to support synergy realization.

• Illustrative leverage ratio post-acquisition is expected to be around 2.0x including synergies, based on 2023 figures.

Synergies and expected cost savings

• Annual pre-tax synergies of EUR 30 million expected, with EUR 20 million from cost savings and EUR 10 million from commercial/revenue synergies.

• Full synergy effect anticipated by 2027, with gradual realization starting in 2025.

• Synergies projected to enhance EBITDA margins and drive EPS accretion, with the combined company targeting an adjusted EBITDA margin of 11.6%.