Cable manufacturer NKT has acquired SolidAl, a Portugal-based wire company, from Njord Partners for €192m.
The deal will add medium- and high-voltage capacity to meet the growing demand from grid upgrades and renewable energy projects across Europe, said the Danish outfit.
As part of the acquisition, NKT will invest in additional capacity at the existing site 50km north of Porto, Portugal.
“SolidAl provides a strong strategic fit in terms of capacity and competence, strengthening NKT’s position in serving customers with end-to-end grid solutions, particularly the growing demand for medium- and high-voltage power cables up to 225 kV,” said NKT president and chief executive Claes Westerlind (pictured).
He added: “We look forward to welcoming SolidAl’s highly skilled employees to NKT and continuing our growth journey together.
“With more than 50 years in the industry, SolidAl will complement the competitiveness of the product mix from NKT’s existing factories in Asnaes, Velke Mezirici and Cologne focusing on delivering the full range of power cables for the grid at a larger scale.”
SolidAl chief executive François Moufflet said: “NKT’s acquisition of SolidAl is a testament to our team’s dedication and hard work.
“NKT is a widely recognized worldwide leader in the manufacturing of power cables and accessories, and I could not think of a better owner to support SolidAl in expanding its commercial reach and technical capabilities.”
Adding an established production footprint in Southern Europe will enhance NKT’s geographical footprint and reach in selected key markets, the company added. SolidAl’s strong presence in France, UK, Ireland, Spain, and Portugal expands it into new markets and strengthens its existing foothold in others.
In 2023, SolidAl had revenue (in market prices) of approximately €150m and generated an EBITDA of approximately €20m.
NKT has acquired SolidAl for a total enterprise value of €192m, corresponding to an EV/EBITDA multiple of 9.4x.
The Danish outfit said it has identified recurring synergies which will gradually contribute to an improved financial performance starting in 2025 and are expected to be fully realised by end 2026. Including synergies, the acquisition of SolidAl corresponds to an EV/EBITDA multiple of 7.0x.
As part of the acquisition, NKT will invest an additional €50m to expand the medium- and high-voltage capacity at the existing site. The new production capacity is anticipated to be operational in 2027.
The acquisition, including the investment, is expected to support NKT’s medium-term financial ambitions including delivering RoCE above 20%.
The transaction is unconditional, and closing is effective as of today. The acquisition was funded within the existing capital structure. NKT said it remains committed to a conservative capital structure with leverage ratio <0.0x catering for the investment programs ongoing and enabling the high-voltage projects.
SolidAl is expected to contribute to NKT’s financial performance from the date of closing. The contribution is expected to be in line with 2023 and will come in addition to NKT’s 2024 financial outlook announced in company announcement No3 of 21 February 2024, which remains unchanged.