Ementor ASA has entered into agreement to acquire 78.8% of the shares in Sonex Group Holding UAB (Sonex). The transaction sum is agreed to MEUR 16.6 (MNOK 133) for the shares. Through this acquisition Ementor becomes the leading IT infrastructure player also in the Baltic region.
Sonex Group has 400 employees and is headquartered in Vilnius in Lithuania and has a total of 10 offices in Lithuania, Latvia and Estonia and is represented with a small office in Russia with 8 employees.
Through the acquisition of Sonex, Ementor will become the leading IT Infrastructure Company also in the Baltic region, where Sonex is the largest and leading IT Infrastructure provider in Lithuania and Latvia. IT growth rates in the Baltic countries (Lithuania, Latvia, Estonia) rank among the highest in EU, emphasizing the strategic importance of establishing presence in the region. This acquisition is seen as an important strategic step to reach Ementor's ambitious growth targets for 2010 and a natural step after establishment of the software packaging centre in Riga in 2006. The Baltic countries have always been a part of the Nordic in our view, and therefore is this acquisition seen as an integrated part of our strategy.
"We are very pleased to welcome Sonex to the Ementor Group," says Claus Hougesen, CEO Ementor ASA. "The acquisition represents an exciting opportunity in a high growth, cost-effective location close to Ementor's Nordic markets. Sonex brings valuable skills and resources to the table - further benefiting our partners and customers."
Sonex has expected revenue of MEUR 65 (MNOK 520) and EBITDA of MEUR 3.6 (MNOK 29) in 2007, comparable to a revenue growth of 30% and improvement of EBITDA margin of 1.6%-point since 2006. For 2008 the budgeted revenue for Sonex is MEUR 80 (MNOK 640) and an EBITDA of MEUR 4.5 (MNOK 36).
The Sonex Group has four main business areas with 84.4% of the revenue generated from IT infrastructure, 8.8% from security solutions, 2.5% from software development and 4.3% from sale and implementation of Microsoft Business systems (ERP).
"As founder of Sonex I am happy to take the company to the next level, as part of the Ementor Group," says Mr Arunas Bartusevicius, founder and President of Sonex Group. "As a result of the strategic fit between our companies, we are now extremely well positioned for further growth in the Baltic IT infrastructure market."
In line with the Ementor Group's strategy, focus in the Baltic countries will be revenue growth based on the IT infrastructure business. Consequently after completion of the transaction Sonex' ERP unit is expected to be divested from Sonex Group, and Ementor is negotiating with the Danish based Columbus IT Partners to buy all ERP businesses activities. Sonex' ERP business has 85 employees and an expected revenue of MEUR 2.8 (MNOK 22.4) and EBITDA of MEUR 0.3 (MNOK 2.4) in 2007. Ib Kunøe, Chairman of Ementor ASA is also Chairman of Columbus IT Partners and his company Consolidated Holdings is the largest shareholder with 32.9% of the shares in Columbus IT Partner which is listed on Copenhagen Stock Exchange.
The Sonex shares will be acquired by Ementor ASA from sellers, the Swedish based private equity fund Askembla Growth Fund (53.3%), the founder and President Mr. Arunas Bartusevicius (41.7%) and senior managers (5%). After completion of the transaction Ementor ASA will own approximately 78.8%, Mr. Bartusevicius 20.0% and key management members 1.2% of Sonex Group Holding UAB.
After a period of three years Ementor has an option to acquire all shares from Mr. Bartesevicius, who can also demand that Ementor buys his shares after a 3-year period from completion of the transaction. Ementor is expected to buy a proportion of shares owned by key management members during the coming three years.
The founder and President of Sonex Group, Mr. Arunas Bartusevicius, will continue as President & CEO in Sonex and become part of the Ementor Senior Management group.
The Ementor Group is performing in accordance with expectations, and the forecast for 2007 is an EBITDA of approximately MNOK 490 (before option costs) and has an increasing cash flow from operations y-o-y, which means that the acquisition of Sonex can be financed within existing credit facilities. (In addition we will reverse a previously allocated extraordinary cost in the order of MNOK 10).
The transaction is subject to approval from the competition authorities in Lithuania. The transaction is expected to be completed in January 2008.