About the acquisition of Nortech

Nortech was founded in 1993 and is a British market leading designer and supplier of monitoring and control technology for the UK water and electricity distribution sector. The company has proprietary products specialised in fault detection, communication and automation as well as the proprietary software platform, iHost, for data aggregation and analysis. Nortech supplies a range of products to all of the UK distribution network operators, and is the sole provider of data aggregation software to these customers, and is the only player in the market with a hardware-agnostic software platform. The company's products are also used for pumping stations in the water sector.

In the fiscal year 2024, Nortech generated an EBITA of SEK 40 million with an EBITA margin of approximately 30%, and a return on working capital (EBITA/working capital) of over 200%. Over the past five years, Nortech has generated an organic compounded annual growth rate of 16%. The acquisition was completed at an EV/EBITA multiple of approximately 7x.

Nortech has 38 employees and is headquartered in Evesham, England.

The company will be consolidated into Vestum’s financials from the second quarter 2025.

About the divestitures of Rosenqvist Entreprenad and Markax

Rosenqvist Entreprenad and Markax carry out civil engineering contracts. The companies generate an annual accumulated EBITA of approximately SEK 25 million with an EBITA margin of 4%. The divestitures were completed at an EV/EBITA multiple of approximately 5x. Rosenqvist Entreprenad and Markax, whose focus is on carrying out larger contracts, have been the largest and third largest company in the Solutions segment, respectively.

The divestments result in capital losses and will be booked in the income statement for the first quarter under the item profit/loss from discontinued operations, which in its entirety is expected to result in a close to neutral effect due to the previously announced preliminary capital gains arising from the divestments that were completed earlier this year. The Group's cash flow and operating profit are not affected by the capital gains/losses.

The divested companies will be excluded from Vestum's figures from the first quarter 2025, but do not trigger an adjustment for IFRS 5.

Comments from Simon Göthberg, CEO of Vestum:

We are today pleased to announce the acquisition of Nortech, which creates a new platform within Vestum's Flow Technology segment. Nortech has for a decade been a supplier to our existing water pumping operations in the UK and it is largely thanks to these businesses that we have been successful in attracting Nortech to become part of Vestum. Nortech is a market leader, with high market share, in monitoring and control technology in the structurally growing energy and water distribution sector in the UK and has, with over 30 years in the industry, extensive experience in providing innovative products to its customers. The company also sells its products internationally. Overall, we continue to deliver on our strategy to acquire high-margin companies in growing niches, while exiting the generalist part of the civil engineering industry in connection with the divestments. We are divesting SEK 25 million in EBITA with a 4% margin, and acquiring SEK 40 million in EBITA with a 30% margin. We look forward to continuing to strengthen profitability within Vestum, both organically and through acquisitions, says Simon Göthberg, CEO of Vestum.

Advisors

Grant Thornton has acted as financial advisor, Baringa as commercial advisor and Fieldfisher as legal advisor to Vestum in connection to the acquisition.