NKT (NKT) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Solidal/SolidAl provides a strong manufacturing base in Portugal, expanding reach in Europe, especially in France, UK, Spain, Portugal, and Ireland, and enhances product mix in medium and high-voltage cables up to 225kV.

• Addresses rising demand for grid upgrades, electrification, and renewable energy projects across Europe.

• Solidal/SolidAl's established customer relationships and skilled workforce offer a robust platform for future growth and talent recruitment.

• The deal supports ambitions to grow market share in the power grid value chain and aligns with long-term electrification trends.

• Enhances competitiveness and product offering, supporting medium-term ambition for ROCE above 20%.

Financial terms and conditions

• Enterprise value of EUR 192 million, funded within existing capital structure, with leverage ratio below 0.0x.

• Transaction valued at 9.4x 2023 EBITDA, reducing to 7.0x after synergies.

• Additional EUR 50 million investment planned to expand capacity, with capex in 2025–2026 and operational by 2027.

• Solidal/SolidAl generated EUR 150 million revenue and EUR 20 million EBITDA in 2023.

• Transaction and integration costs expected to be below EUR 6 million.

Synergies and expected cost savings

• EUR 7 million recurring EBITDA synergies expected by end-2026, mainly from top-line growth and operational efficiencies.

• Synergies to be realized through production optimization, procurement, and sales channel improvements.

• Acquisition is EBITDA margin accretive for the Applications business line.

• Channel distribution and geographical optimization to further enhance synergies.

• Full realization of synergies anticipated by end of 2026, reducing EV/EBITDA to 7.0x.