Tieto (TIETO) M&A Announcement summary

Deal rationale and strategic fit

• Divestment accelerates transformation into a focused international software and digital engineering company, aligning with the strategy to maximize shareholder value and enhance positioning in higher-growth segments.

• Tech Services, historically more capital intensive, differs from the core focus and will leverage its Nordic leadership to expand managed services and transformation offerings under new ownership.

Financial terms and conditions

• Sale price is EUR 300 million, including EUR 70 million in earn-out payments based on 2026 and 2027 performance, payable as vendor loans.

• Purchase price subject to customary closing adjustments, including net debt and working capital.

• EUR 100 million in lease liabilities will transfer with the business.

• Tietoevry plans to use proceeds primarily to reduce debt, with potential for capital distributions to shareholders.

Synergies and expected cost savings

• Significant reduction in working capital and CapEx (by approximately 40%) expected due to less capital-intensive operations.

• Cash restructuring charges will decrease as Tech Services accounted for most historical one-time costs.

• Group adjusted EBITA margin to increase by ~1.2 percentage points, and improved SG&A ratio anticipated post-transaction.