BOREO PLC Inside information, Stock exchange release 1 April 2025 at 09:00 EET

Inside information: Boreo and RS Group strengthen long-term partnership - Boreo acquires Elfa Distrelec sales activities in Finland and the Baltics

Boreo Plc has signed an agreement to acquire the sales activities of Elfa Distrelec in Finland, Latvia, Estonia and Lithuania (the “Sale Businesses”) from RS Group plc (“RS”) (the “Transaction”). Boreo acquires the Sale Businesses via its subsidiaries and, upon completion, will create a new YE RS business (“YE RS”) by combining the acquired Elfa Distrelec activities with its existing RS activities currently operated within Yleiselektroniikka, YE International AS, YE International SIA and UAB YE International.

Following completion of the Transaction, YE RS will become a high-service, digital-led distributor of industrial and MRO products in Finland and the Baltics. Boreo and RS together plan to drive the future growth of the new business and YE RS will provide its customers with a significantly wider product offering, improved customer experience, operational efficiencies, and value-add services.

“Our history with RS dates back to early 1990s’ and we are delighted to strengthen the long-standing partnership with RS and continue creating value in our markets. The strong alignment of RS and Boreo to drive sustainable long-term growth, build on partnerships and high standards of business ethics create a strong foundation for the partnership and success. We are excited of the opportunity to create a new integrated growth platform, with attractive investment opportunities and an opportunity to create value for our customers”, says Boreo CEO Kari Nerg.

The Sale Businesses employ ten professionals in Finland and the Baltic countries and in FY2024, the revenue was approximately EUR 15 million. The Transaction consists of three business acquisitions in the Baltic countries and acquisition of shares in Finland.

Enterprise Value for the Transaction is EUR 5.5 million based on the Sale Businesses’ adjusted annual operating profit of approximately EUR 1.1 million. The purchase price, subject to customary completion adjustments, will be paid in cash in four instalments: EUR 4 million at closing and EUR 1.5 million during three years from closing in equally sized three instalments. Boreo will fund the payment of the purchase price with its existing financing facilities.

Completion of the Transaction is subject to customary closing conditions including regulatory approvals in Finland and Estonia and is expected to close in the third quarter of 2025.

The business will be reported under Boreo’s Electronics Business Area.

“We are excited to have signed both this Transaction and the Spetselektroodi acquisition announced yesterday, as these are important steps for us to achieve the target to return back to growth. Due to the business models, margin profiles, strong cash flows and capital-light nature, the acquired businesses fit well with our target company profile and improve the quality of our portfolio. We look forward to working towards closing of the transactions and warmly welcoming the new personnel to Boreo family“, says Boreo CEO Kari Nerg.

Vantaa, 1 April 2025

Boreo Plc

Kari Nerg

CEO

Distribution:
NASDAQ Helsinki Ltd
Principal media

www.boreo.com

For more information:

CEO Kari Nerg

+358 44 341 8514

CFO Jesse Petäjä

+358 40 706 9450

Elfa Distrelec’s key financials^{1 2 3}

¹ Combined key financials (Finland, Estonia, Latvia and Lithuania).

² Key financials are based on local GAAP standards, financial year ending 31.12, except for fiscal year 2024 ending on 31.03.2024, being a 15-month financial period.

³ The reported figures are not representative of the acquired scope as it includes specified assets and liabilities.

⁴ Adjusted annual operating profit of the Sale Businesses approximately EUR 1.1 million.

Boreo in brief:

Boreo is a company listed on Nasdaq Helsinki that creates value by owning, acquiring and developing small and medium-sized companies in the long-term. Boreo's business operations are organized into two business areas: Electronics and Technical Trade.

Boreo's primary objective is sustainable long-term profit generation. This is achieved with a business model that is based on the acquisition and ownership of great entrepreneurial companies with the ability to generate sustainable long-term earnings growth and strong cash flows. The profits generated by the portfolio of companies are re-invested back to operations or to acquisitions with attractive expected returns on capital. The decentralized operating structure promoting a culture of ownership and release of entrepreneurial energy is a core pillar of the company's business concept and sustainable earnings growth is ensured through the support and coaching of companies and the personnel.

The Group's net sales in 2024 were EUR 134 million and it employs over 300 people in seven countries. The company’s headquarter is in Vantaa.