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, Ireland, and Portugal, and enhances product mix in medium and high-voltage cables up to 225kV.

• Addresses increased demand driven by electrification, renewable energy, and aging European power grids, supporting ambitions to grow market share in the power grid value chain.

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

• Enhances competitiveness and ability to serve power transmission and distribution operators with end-to-end solutions.

• Supports medium-term ambition for ROCE above 20%.

Financial terms and conditions

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

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

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

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

• 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, efficiency gains, and production optimization.

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

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

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