Solwers : Acquires quality architectural expertise in Finland - Nordea

Solwers’ subsidiary Davidsson Tarkela Architects Oy has today signed an agreement to acquire 100% of Siren Architects, Finland’s oldest architectural firm. For the last reported 12 month period (3/2023-2/2024), Siren Architects had revenue of EUR 1.75m and an adjusted EBIT margin of 13.5% (EUR ~240,000) versus EUR 1.74m and 14.4% the previous year, respectively, and employs 18 professionals. The acquisition will be reported as part of Solwers as of 1 July. Design references include numerous residential and office buildings, educational institutions, sports facilities, renovations and urban planning including many landmark buildings in Finland. The purchase price is not disclosed, but part of the purchase price is paid in 103,632 newly issued shares (EUR ~400,000) and the rest in cash. If we assume 25-30% of the purchase price is paid with shares, the purchase price corresponds to an EV/EBIT multiple of 5.6-6.7x assuming Siren Architects has zero net debt. The acquisition adds 3% to Solwers’ 2023 sales and 5% to EBIT. We view the news as positive as Siren Architects appears to be a quality company and performing well, assuming the purchase price is close to our estimated range and not substantially above.