Kesko (KESKOB) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of Dahl's operations in Sweden, Norway, and Denmark expands reach in HPAC and infrastructure construction, aligning with long-term growth strategy and filling a rare opportunity for expansion in the Nordic region.

• The acquired businesses are leading technical trade operators, complementing existing operations with no overlap, especially in HPAC and infrastructure products.

• The deal leverages megatrends such as renovation, urbanization, green transition, and digitalization for long-term growth.

• Strengthens international presence, with 71% of division net sales and 33% of group net sales projected from outside Finland post-acquisition.

• Marks the largest acquisition in company history, aiming to make technical trade the biggest division.

Financial terms and conditions

• Debt-free transaction price is EUR 1.2 billion (EUR 1.518 billion including lease commitments at end of 2025).

• Initial bridge financing from Danske Bank and Nordea to be refinanced with equity and debt; planned equity component via share issue of EUR 500–700 million.

• Combined net sales of acquired companies total EUR 2.1 billion, EBITDA EUR 146 million.

• EV/EBITDA ratio is approximately 10.4 based on 2025 EBITDA.

• Non-recurring transaction costs estimated at EUR 8 million.

Synergies and expected cost savings

• Primary synergies expected from sourcing, private label, IT, and higher purchase volumes, especially in HPAC products, nearly tripling sales volumes.

• Integration will be light to avoid disrupting existing business, with acquired units continuing under current brands.

• Additional synergies from expanded product portfolio and cost efficiencies, targeting a 6–8% operating margin.

• Earnings improvement and cost efficiencies are expected over the coming years.