ITAB Shop Concept (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.

• The deal accelerates expansion into key markets, especially in Western and Southern Europe, the Middle East, and South America, and creates a leading solutions provider in retail infrastructure.

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

• Strategic focus includes expanding sales of Retail Technology and services, with significant cross-selling opportunities.

• 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 is EUR 320 million on a debt-free basis, representing a 6.4x 2023 Adjusted EBITDA multiple before synergies and 4.0x after synergies.

• Transaction is financed by EUR 255 million in new long-term debt and EUR 75 million (SEK 850 million) in new equity, with strong investor interest and broadened ownership.

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

• One-off integration costs are estimated at EUR 21 million over three years, with transaction costs at EUR 10 million.

• Illustrative leverage ratio post-acquisition is expected to be 2.0x including synergies, 2.6x excluding synergies, based on 2023 figures.

Synergies and expected cost savings

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

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

• Combined company projected to reach an adjusted EBITDA margin of 11.6%, up from ITAB's standalone 8.7%.