Ratos acquires NVBS and Ratatek – creates Nordic challenger in railway infrastructure

Regulatory Information 2022-03-30

Ratos has signed an agreement to acquire 74% of the Swedish company NVBS Rail Group Holding AB (NVBS), which in turn has signed an agreement to acquire 100% of the Finnish company Ratatek. NVBS will become a Nordic platform company for Ratos in the attractive and growing railway infrastructure market, with a presence in Sweden, Finland and Norway. Together, the companies had pro forma revenues of SEK 978m in 2021, with adjusted EBITA of SEK 113m. The cash-free, debt-free purchase price for 100% of both companies amounts to SEK 1,066m. NVBS will belong to Ratos business area Construction & Services.

“Maintenance and upgrades of critical infrastructure is an attractive and growing niche in which Ratos established a position in road maintenance in 2021. With the acquisition of NVBS, we are now broadening our offering into the expanding railway market – a market where NVBS and Ratatek have excellent prospects for continued organic and acquisition-driven expansion,” says Christian Johansson Gebauer, President Business Area Construction & Services at Ratos.

NVBS is a fast-growing player in maintenance, improvement and construction of critical railway infrastructure in Sweden and Norway. The company specialises in rail-related services, including groundwork, track, electrical, signal and telecom. Through a strong focus on efficient operations and meeting the customer’s expectations, NVBS reported an organic compound annual growth rate (CAGR) of 30% between 2019 and 2021. The company had pro forma revenues of SEK 719m in 2021, with adjusted EBITA of SEK 85m.

Ratatek specialises in the design, installation and maintenance of overhead contact lines and electrical systems on tram and railways, with operations in Finland and Sweden. The company already has a successful partnership with NVBS in the Swedish market. Ratatek’s key personnel will be part of the owner group in NVBS in conjunction with the transaction. Ratatek had sales of EUR 25.5m in 2021, with adjusted EBITA of EUR 2.7m.

“With the acquisition of NVBS, Ratos has secured a majority shareholding in one of the Nordic region’s fastest-growing players within railway infrastructure. We are impressed with NVBS’s culture, entrepreneurial spirit and decentralised governance model, which has enabled the company’s rapid growth. The fact that the founders and key personnel of NVBS have chosen to retain a holding of 26% is very positive, and we look forward to building a strong Nordic market challenger together,” continues Christian Johansson Gebauer.

“Since 2012 when NVBS was founded it has established a strong position as a fast-growing contractor specialising in railway environments with a focus on profitable growth in the Swedish market. With Ratos as our new principal owner, we can now take the next step in our growth journey, and we see significant opportunities to expand our business model to new geographic areas,” says David Skalin, President and CEO of NVBS.

“The acquisition of NVBS and Ratatek is an excellent match for the business area and will also contribute to, and themselves be able to leverage, soft synergies with other companies,” says Jonas Wiström, President and CEO of Ratos.

Acquisition financing and valuation and impact on Ratos
NVBS and Ratatek had pro forma sales of SEK 978m in 2021, with adjusted EBITA of SEK 113m. The cash-free, debt-free purchase price (enterprise value) for 100% of the shares in both companies amounts to SEK 1,066m, corresponding to an EV/EBITA multiple of 9.4x for the full-year 2021. The acquisition was financed with Ratos’s own funds and bank financing. The founders have chosen to remain as owners of NVBS in conjunction with Ratos’s acquisition, with a holding amounting close to a quarter of the shares in the company. After a certain period of time and at the earliest in full after seven years, both the founders and Ratos have a customary right to demand that Ratos acquire the shares at market value.

For the Ratos Group, the acquisition corresponds to a pro forma increase in sales of just over 4% and an increase of nearly 7% in EBITA for full-year 2021. The Ratos Group’s leverage in December 2021 amounted to 0.2x EBITDA and increase pro forma to 0.6x EBITDA.

Terms of the transaction
The acquisition, which is conditional on customary competition clearance, is expected to be completed in May 2022.

For further information:
Jonas Wiström, President and CEO, Ratos, +46 8 700 17 00
Christian Johansson Gebauer, President BA Construction & Services, Ratos, +46 8 700 17 00
Josefine Uppling, VP Communication, Ratos, +46 76 114 54 21
David Skalin, President and CEO, NVBS, +46 763 166 136

This is information that Ratos AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 a.m. CEST on 30 March 2022.

About Ratos
Ratos is a business group consisting of 13 companies divided into three business areas: Construction & Services, Consumer and Industry. In total 2021, the companies have approximately SEK 35 billion in sales. Our business concept is to develop companies headquartered in the Nordics that are or can become market leaders. We enable independent companies to excel by being part of something larger. People, leadership, culture and values are key focus areas for Ratos. Everything we do is based on Ratos’s core values: Simplicity, Speed in Execution and It’s All About People.