Eqva ASA

M&A Activity • Feb 17, 2025

EQVA secures landmark business combination with IMTAS, expanding into Northern Norway

EQVA secures landmark business combination with IMTAS, expanding into Northern Norway

February 17, 2025 – EQVA ASA («EQVA» or the “Company”) has entered into an agreement to purchase 100% of the shares in IMTAS AS and its subsidiaries other than IMTAS Eiendom AS (“IMTAS Group”). The acquisition will be carried out by EQVA's wholly owned subsidiary Eqva Industrial Solutions AS ("EIS", formerly known as Nordic Industrial Solutions AS). The business combination strengthens the EQVA group’s service offerings and market position and increases revenues by approximately 30%.

The transaction is fully funded by a combination of acquisition finance, reinvestment from IMTAS management and shareholders in Eqva ASA, as well as a seller’s credit.

The bolt-on acquisition of IMTAS is of high strategic value for EQVA and its shareholders:

- The business combination marks EQVA’ largest transaction to date, where EQVA through its wholly-owned subsidiary EIS will acquire the IMTAS Group, valued at NOK 190 million in Enterprise Value (EV), excluding leasing liabilities and a conditional earn out of up to NOK 30 million.

- Repeating EQVA’s success formula from Southern Norway in Northern Norway, building an industrial service and maintenance group with a strong foothold along the entire Norwegian coast

- Strengthening our position as a prominent and fully integrated service provider within the piping, mechanical and power and automation disciplines

- Becoming an even better and more relevant partner for large customers in land- and sea-based industries

“Through the acquisition of IMTAS Group, EQVA continues to deliver on its strategy for growth and broadening of its service offering. This business combination enhances EQVA’s access to attractive markets in Northern Norway such as the process industry, aquaculture, renewable energy and construction.

We look forward to working with our new colleagues in both Mo i Rana and Harstad and will strive to further enhance our service offering for our valued customers,” said Even Matre Ellingsen, CEO of EQVA.

Operational expansion and administrative synergies:

IMTAS Group offers services that are complementary to EQVA’s current operations. The transaction expands the group’s geographical area of operations, diversifies customer and revenue streams, and strengthens the overall service offering. In addition to project delivery capabilities, the business combination will yield substantial synergies across sales, sourcing and operational expenses.

As of today, EQVA’s operations are mainly focused on markets in the Southern part of Norway. The acquisition of IMTAS Group will add valuable expertise and a strong presence in Northern Norway. The business combination strengthens EQVA’s ability to undertake major multidisciplinary contracts for industrial customers all-over Norway. Going forward, EQVA group will consist of more than 750 highly qualified employees.

After the transaction, EQVA will through its wholly owned subsidiary EIS be the sole owner of IMTAS Group. The IMTAS-companies will continue to operate under their current brand and management, ensuring a seamless continuation of their operations.

«We are excited to become part of EQVA. We have a history of strong growth in our local markets and good relationships with key customers. This merger gives us an opportunity to combine forces to further strengthen our service offering to existing and new customers.” said Johannes Sandhei, CEO of IMTAS Group.

About IMTAS Group:

The IMTAS Group is a provider of industrial services focusing on process industry, aquaculture, maritime/offshore, renewable energy and construction, headquartered in Mo i Rana. The group offers services and expertise within engineering, fabrication/machining, installation and maintenance.

With over 200 employees, IMTAS Group primarily provides services in Northern Norway. The group has delivered strong financial development over the last 10 years, with a CAGR on revenues of 19% from 2015 to 2024.

The acquisition includes the following companies: IMTAS AS, IMTAS Prosjekt AS, IMTAS Personell AS, IMTAS Harstad AS and Jakobsen Mekaniske Verksted Drift AS. IMTAS Eiendom AS, which is currently owned by IMTAS AS, will be carved out from the transaction perimeter.

The IMTAS Group will carry out a minor internal reorganization in connection the transaction, i.a. so that IMTAS AS will acquire 35% of the shares of Harstad Eiendom AS so as to make it a wholly owned subsidiary of IMTAS AS (the "IMTAS Reorganization").

The sellers, who also include the management team of the acquired companies, will continue in their existing positions and as owners of the combined business through shares in EQVA ASA. The sellers will also undertake customary non-compete obligations.

Financial impact:

The acquisition is expected to add approx. NOK 376 million in financial year 2024 revenue, for a combined EQVA financial year revenue of more than NOK 1.5 billion (based on unaudited full year pro forma financials).

For the financial year 2024, it is estimated that IMTAS Group generated approx. NOK 39 million in EBITDA, bringing the combined EBITDA for EQVA within a range of NOK 120 – 130 million on a consolidated basis (based on unaudited full year pro forma financials).

With an IMTAS Group EBITDA-margin (2024) of approx. 10.4%, the pro forma EBITDA-margin (2024) of the consolidated EQVA Group increases to approx. 7.5% (based on unaudited full year pro forma financials).

Acquisition terms and financing:

The acquisition value the IMTAS Group (post the IMTAS Reorganization) at an EV of NOK 190 million, excluding leasing liabilities and a conditional earn out of up to NOK 30 million. The EV of NOK 190 million implies an EV/EBITDA (2024) multiple of 4.8x. The total equity transaction value payable by EQVA amounts to NOK 160,8 million and an agreed compensation for the IMTAS Group’s estimated profits until closing of the Transaction in 2025 (2024e profits estimated at NOK 21 million) and a conditional earn out of up to NOK 30 million (“The Consideration”).

The earn-out is performance based, and calculated on the IMTAS Group's average EBITDA in 2025 and 2026. No earn-out will be paid if the IMTAS Group's average EBITDA in 2025 and 2026 is NOK 31,200,000 or lower. The earn-out shall not in any event exceed NOK 30,000,000. The EBITDA is subject to certain adjustments for extraordinary events.

The Consideration will be settled as follows:

(i) NOK 68.8 million of The Consideration will be settled by the issuance of 6,113,190 shares in EQVA (“The Consideration Shares”) to the sellers at a subscription price of NOK 11.25 per Consideration Share. 5,616,438 of The Consideration Shares will be issued at completion of the acquisition of the shares of IMTAS AS. The remaining 496,727 Consideration Shares will be issued upon completion of the IMTAS Reorganization. The Consideration Shares will be subject to a lock-up period, with 50 percent of The Consideration Shares being released after 9 and 18 months from the date of the completion of the acquisition of the shares of IMTAS AS, respectively.

(ii) Approx. NOK 52 million of The Consideration plus 50% of the IMTAS Group's net profit after tax for 2024 will be settled by EIS in cash (“The Cash Consideration”). The Cash Consideration will be financed by a combination of cash within the Group and a committed acquisition financing offer from Nordea.

(iii) Approx. NOK 40 million of The Consideration plus 50% of the IMTAS Group's net profit after tax for 2024 will be settled by the issuance of a Seller’s Credit (“The Seller’s Credit Consideration”). The Seller’s Credit Consideration will have a 12-month duration, with an interest of 8% p.a.

(iv) The earn-out shall fall due for payment 10 business days after they have been calculated based on the IMTAS Group's audited accounts for 2026.

EQVA will issue The Consideration Shares and guarantee NOK 48.3 million of The Seller’s Credit Consideration. In addition, EQVA will guarantee NOK 24.5 million, which will occur as part of the IMTAS Reorganization and which will be held intra the EQVA Group following its completion.

EQVA has secured a committed offer from Nordea, combining acquisition and refinancing, totalling NOK 200 million. Additionally, the agreement will expand EQVA's existing overdraft facility to NOK 70 million. This long-term loan, with a maturity of five years, features more favourable interest rates for EQVA. The refinancing arrangement also allows for dividend distributions, given a leverage ratio (NIBD / EBITDA LTM) of less than 1.5 (after distribution). EQVA estimates an opening leverage ratio of less than 2.5 after closing of the acquisition. Furthermore, it will consolidate various banking relationships into a single primary bank for the group, simplifying future financial management.

Conditions:

The acquisition is expected to be completed by the end of Q1 2025 and will be subject to inter alia the adoption of the IMTAS Reorganisation, and the approval from the Norwegian Competition Authority (No: “Konkurransetilsynet”).

The Consideration Shares will be listed on the Oslo Stock Exchange.

Webcast:

EQVA invites investors, analysts and media to attend the live webcast presentation of EQVA’s YTD Q4 2024-results and more details about the acquisition.

Time and date: Thursday 27 February at 09:00 CEST.

🔗 Link to webcast: https://lnkd.in/dRCxvJhD

About EQVA:

EQVA is a company group that specializes in acquiring and developing tier-1 companies that provide productive, safe, and sustainable service & solutions to leading industrial companies

We are dedicated to long-term ownership, focused on creating value through sustainable development, growth, and profitability. Our goal is to acquire companies that align with our business model. We are positioning ourselves as an attractive buyer not solely based on financial terms, but by offering a comprehensive "toolbox" of expertise, experience, and resources to drive value creation.

EQVA is built on three platforms: EQVA Industrial Solutions, Renewables and Real Estate. EQVA Industrial Solutions is the main platform, generating more than 90 % of EQVA’s revenues in 2024. Key companies under EQVA Industrial Solutions include BKS Group, IMTAS Group and Kvinnherad Elektro Group. The acquisition of IMTAS Group strengthens EQVA’s position as a prominent and fully integrated service provider within the piping, mechanical and power and automation disciplines – all over Norway.

For more information, contact:

Even Matre Ellingsen CEO EQVA ASA, + 47 990 05 500

Johannes Sandhei, CEO IMTAS Group, +47 911 64 435