Back

Etteplan acquires Espotel Oy and Soikea solutions Oy

17.03.2016 espotel , kari liuska

ETTEPLAN OYJ, STOCK EXCHANGE RELEASE, MARCH 15, 2016 AT 10.00

ETTEPLAN EXTENDS ITS SERVICE CONCEPT INTO INDUSTRIAL INTERNET SOLUTIONS WITH
TWO ACQUISITIONS.  FINANCIAL GUIDANCE FOR 2016 RAISES - BOARD OF DIRECTORS
PLANS RIGHTS ISSUE.

In order to meet its customers' needs in digitalization Etteplan strengthens
its expertise in embedded systems and industrial internet solutions. Etteplan
acquires in two separate transactions the total share capital of Espotel Oy and
Soikea Solutions Oy and strengthens its position as a leading engineering
services provider. By widening its strong engineering expertise into digital
data management and embedded systems, Etteplan continues as a forerunner of
innovative engineering services. The transaction combines intelligent devices,
documentation and industrial internet applications into a unique service
concept in the engineering services industry. By extending its service concept
into industrial internet applications, Etteplan provides new value-added to its
customers especially in the development of their service and maintenance
business.

- Etteplan Oyj acquires the total share capital of Espotel Oy (Espotel) and
Soikea Solutions Oy (Soikea).
- The combined revenue of the companies to be acquired totaled in 2015 at
approximately EUR 29 million. The acquisitions have a positive impact on the
operating profit (EBIT) in 2016.
- The financial guidance 2016 is updated as follows: We expect the revenue and
operating profit for the full year 2016 to grow significantly compared to
2015. The financial guidance as given in the financial statement release on
February 11, 2016: We expect the revenue and operating profit for the year
2016 to grow clearly compared to 2015.
- Etteplan's long-term financial targets remain unchanged.
- The value of the transaction (Enterprise Value, EV) is approximately EUR 29
million. In addition there is an earn-out element which is subject to achieving
certain financial result related milestones.
- Etteplan's Board of Directors is planning a rights issue of approximately EUR
14 million to finance the acquisitions.
- Ingman Group Oy Ab, Etteplan's largest shareholder, grants to Etteplan a
bridge financing of approximaterly EUR 10 million, which will be converged to
shares in the planned rights issue.
- Etteplan will transfer a total of 221,365 treasury shares to key private
owners of Espotel and Soikea.
- Etteplan shall also take a bank loan to finance the acquisitions as well as
use other available financing facilities.
- The acquisitions are estimated to be completed by April 4, 2016.
- The run-rate of the synergies from the transaction are estimated to be
approximately EUR 0.4 million and expected to materialize starting from the
beginning of 2017.

Etteplan has today agreed to acquire the total share capital of Espotel Oy and
Soikea Solutions Oy from their key personnel and private equity investment
companies. Espotel is one the leading engineering services companies in the
Nordics specializing in embedded systems, production testing solutions and IoT
(Internet of Things) solutions for industrial purposes. Soikea is a specialist
in digital data transfer and management, whose multichannel solutions produce
the right information to the right place at the right time. The comprehensive
product and service solutions of Espotel and Soikea meet well the demands for
digitalization in the industrial sector. The experts of the companies have
extensive experience ranging from the design of CPU based equipment to digital
systems.

The companies employ together some 330 professionals, who will continue in
Etteplan Group. Espotel and Soikea have operations in Finland, Sweden and
Poland.

Industrial internet, which is also said to be the third industrial revolution,
is one of the most important transitions both in Finland and globally.
Intelligent and connected products enable industrial equipment manufacturers to
expand their business from manufacturing of traditional products to management
of comprehensive product systems. The transaction, which was announced today,
combines industrial internet and digital data transfer and management with
Etteplan's extensive machine and equipment design engineering and technical
documentation expertise and creates new growth opportunities in the fast
growing market of industrial internet applications.

Preliminary combined financial information

Below preliminary combined financial information that has been produced for
this release and is based on 2015 figures:

EUR million                     Combined  Etteplan  Acquired
Revenue                            169.7     141.1      28.6
EBIT from business operations*      12.6       9.5       3.1

* EBIT excluding acquisition related items such as amortization on PPA
allocations and earn out revaluations

The combined revenue in 2015 for embedded systems and industrial internet
solutions was approximately EUR 40 million.

The acquisitions will have a positive impact on the operating profit (EBIT) in
2016.

The run-rate of the synergies from the transaction are estimated to be about
EUR 0.4 million and expected to materialize starting from the beginning of
2017.

After the transaction Etteplan's preliminary total assets are approximately EUR
135 million. The transaction will raise Etteplan's preliminary goodwill by
approximately EUR 17 million.

Updated financial guidance due to transaction

Financial guidance for 2016 is updated as follows: We expect the revenue and
operating profit for the full year 2016 to grow significantly compared to
2015. The financial guidance as given in the financial statements release on
February 11, 2016: We expect the revenue and operating profit for the year
2016 to grow clearly compared to 2015.

The long-term financial goals of the Company remain unchanged:

- On average 15 per cent annual revenue growth
- 10 per cent EBIT from business operations*
- Improvement of operating cash flow
- Growth of share of high value-added services (Managed Services) to 50 per
cent in 2016

* EBIT excluding acquisition related items such as amortization on PPA
allocations and earn out revaluations

Summary of the transaction

The value of the transaction (Enterprise Value, EV) to be paid by Etteplan is
approximately EUR 29 million. In addition there is an earn-out element which is
subject to achieving certain financial result related milestones.

Etteplan's Board of Directors plans a rights issue of approximately EUR 14
million to finance the acquisitions. The needed authorization by the
shareholders is expected to be received in Etteplan's Annual General Meeting on
April 5, 2016. The invitation to the Annual General Meeting has been published
on February 11, 2016.

Before the execution of the rights issue Ingman Group Oy Ab grants Etteplan a
bridge financing of approximately EUR 10 million, which will be converged to
shares in the planned rights issue. Ingman Goup Oy Ab is Etteplan's largest
shareholder owning 66.05 per cent of the share capital and voting rights (as of
February 29, 2016).

As part of the acquisition price Etteplan tranfers a total of 221,365 treasury
shares to the key private owners of Espotel and Soikea. A three-year (3)
lock-up period is associated with the share transfer.

Etteplan shall also take a bank loan to finance the acquisitions as well as use
other available financing facilities.

The acquisitions are estimated to be completed by April 4, 2016 and the
acquired businesses to be integrated into Etteplan's Group reporting on April
1, 2016.

Juha Näkki, President and CEO, Etteplan Oyj:

Etteplan wants to be a forerunner in engineering services for the
manufacturing industry. With the transaction announced today, we are again
expanding our expertise to meet the needs of our customers even better, when
they are developing their businesses towards knowledge intensive services. The
transaction combines intelligent devices, documentation and applications of
industrial internet into a unique service concept in the engineering services
industry, and provide us with new growth opportunities in the vigorously
growing area of digitalization. By extending our service concept to industrial
internet applications we can offer increased value added to our customers
particularly in the development of their service and maintenance business.

The acquisitions supported by our largest shareholder Ingman Group Oy Ab
strengthen Etteplan's position as a forerunner of innovative service solutions.
I would like to welcome the experts from Espotel and Soikea in the Etteplan
Group and I look forward to jointly developing the industry's leading
engineering and technical documentation services.

Kari Liuska, CEO, Espotel Oy:

Espotel is a leading provider of product creation services for industrial
internet applications, embedded systems and software in the Nordics. Our and
Etteplan's offering complement well each other and strengthen our position in
common key accounts. An industrial owner offers us excellent prerequisites to
internationalize our business and provides our employees interesting
possibilities to develop our operations further.

Atso Vesterinen, CEO, Soikea Solutions Oy:

Soikea's multichannel solutions in digital data transfer complement the unique
service concept, which combines intelligent devices, documentation and
applications of industrial internet in this transaction.  The merger with
Etteplan and Espotel enables us to become part of an industry leader and opens
up for us great growth opportunities in industrial accounts.

Briefings concerning the acquisitions

Etteplan holds a press conference in Finnish on March 15, 2016 at 2 p.m. (EET)
in Tapahtumatalo Bank, Unioninkatu 20, Helsinki. In this event, Juha Näkki,
President and CEO, Etteplan Oyj and Kari Liuska, CEO, Espotel will discuss the
implications of the acquisition.

In addition there will be a telephone conference and webcast in English
targeted at investors and financial analysts starting at 4.30 pm (EET). You can
follow the webcast at http://www.goodmood.fi/webcaster/accounts/etteplan/live/.
The webcast can we viewed later at www.etteplan.com/investors. You can
participate in the telephone conference by dialing to +358 9 2319 5437, 5-10
minutes before the beginning of the event. The event password is Etteplan2016.
The telephone conference and webcast are hosted by Juha Näkki, President and
CEO, Etteplan Oyj

 

In Vantaa, on March 15, 2016


Etteplan Oyj

Board of Directors

Additional information:

Juha Näkki, President and CEO, tel. 0400 606 372
Outi-Maria Liedes, SVP, HR, Communications & Operational Development, tel. 040
756 9620

Etteplan provides engineering and technical documentation services to the
world's leading companies in the manufacturing industry. Our services are
geared to improve the competitiveness of our customers' products and
engineering processes throughout the product life cycle. The results of
Etteplan's innovative engineering can be seen in numerous industrial solutions
and everyday products.

In 2015, Etteplan had turnover of EUR 141.1 million. The company has about
2,100 professionals in Finland, Sweden, the Netherlands, Germany and China.
Etteplan's shares are listed on Nasdaq Helsinki Ltd under the ETT1V ticker.

DISTRIBUTION:

Nasdaq Helsinki
Major media
www.etteplan.com


Latest articles

  • Toroidion super car: a challenge for power electronics 16.06.2017 electronics , power electronics , motor control

    ”Electronics is all about signals, power electronics is all about energy. Power electronics is built on switches”, summarizes Heikki Mentula. He has got over 20 years of experience in designing power electronics.

  • Electric super car Toroidion is Finnish design 16.06.2017 power electronics , motor control

    Pasi Pennanen tells us about Toroidion, the ideas behind the 1MW Concept electric super car and his future insights. We got to meet him at his Finnish office in May. First, we ask him to tell us about his career as a designer for well-known car brands...

  • Quality assurance with vibration measurements - case Sampo-Rosenlew 14.06.2017 test systems , industrial , production testing

    Vibration measurement system improves the quality assurance within the assembly of Sampo-Rosenlew harvesters. Faulty parts are exposed at the factory, before delivering the harvester to the customer.

  • Embedded AC drive 26.05.2016 industrial applications , electronics , power electronics , motor control

    Alternating current (AC) motors have over a century of history. During the last decades, they have dominated the market for motor drives. In the case of variable speed drives, there were some areas where DC motors were the only option for quite long...

  • Powering up testing – getting a grip on software projects 05.05.2017 testing , agile , continuous integration

    Well designed and correctly carried out testing and testing automation help to keep projects on schedule. The maintainability and control of the system are improved, and even the product's financial life cycle is extended. The engineers at Etteplan have had good experiences with the Jenkins and Robot Framework systems.

  • Renovating testing environment with Procket Rapid 13.06.2017 testing , test systems , production testing , agile , continuous integration

    Embedded system is a combination of both hardware and software, the testing and development of which calls also for other things than just software and the device itself.

  • Satel enhances product development 13.06.2017 testing , wireless , software , agile , continuous integration

    Salo-based Satel develops and manufactures radio modems and other wireless communications systems. Satel’s mission critical wireless data connections are in use within over 70 countries.

  • Case Rivender - Stores without salesclerks 16.03.2017 industrial internet , electronics , software

    Grocery stores will make a comeback in suburbs and small towns if entrepreneurs warm to the unmanned store solution ModulShop of Rivender Ltd. The invention is predicted to become a huge success in Finland and European export markets. The solution is based on Finnish leading-edge know-how.

  • Case SKS – Wireless LoRa based sensor 31.03.2017 industrial internet , wireless , electronics , software

    SKS Automation needed a sensor suitable for industrial use that works wirelessly. The selected LoRa technology transmits measurement data wirelessly up to tens of kilometers, and it connects easily to Industrial Internet applications. ARM mbed technology significantly reduced the time needed to pull off the project.

  • Yocto Project - Embedded systems easier and faster 16.12.2015 mikko elomaa , yocto , vesa norrbacka , linux

    Embedded Linux developers often have to create their own distribution to precisely define the contents of the operating system. Those who nowadays choose embedded Linux for a project have several alternatives, one of which is the Yocto Project. Yocto is not an embedded Linux distribution but a development environment with which one can quickly and easily create custom versions.