Admicom Oyj: Admicom makes a significant investment in product development and products by acquiring Aitio Finland Oy and Hillava Oy

Admicom makes a significant investment in product development and products by acquiring Aitio Finland Oy and Hillava Oy

Unofficial translation of the company release on December 22, 2021 at 12:30 pm EEST. In case the document differs from the original, the Finnish version prevails.

Admicom strengthens its pioneering position and competitiveness by acquiring the majority of the shares of Aitio Finland Oy, a Jyväskylä-based company specialising in software development, and Hillava Oy, a software company belonging to the same group. Through acquisitions, Admicom's number of employees will increase by more than 20 software developers and experts.

Founded in 2007, Aitio Finland Oy delivers tailor-made software development services to its customers, as well as related integration and maintenance services, mobile applications and cloud solutions. Hillava      Oy, on the other hand, develops and markets a cloud-based ERP-system, especially for planning and managing field work. The development of the Hillava product started in 2014 as part of Aitio Finland's business operations.

The combined net sales of Aitio Finland Oy and Hillava Oy for 2020 were EUR 2.3 million and EBITDA was 25.5% of net sales. In 2020, approximately EUR 0.4 million of net sales consisted of recurring software and maintenance revenues. Aitio Finland's net sales for 2021 are estimated to be approximately EUR 2.0 million and EBITDA is approximately EUR 0.5 million. Hillava's net sales are estimated to be approximately EUR 0.6 million in 2021 and EBITDA EUR 0 million.  

Aitio Finland's and Hillava's customer base consists mainly of small and medium-sized building technology, construction and industrial companies. The companies' reference customers include Terawatt Oy, Seinäjoen Energia Oy and Puustelli Group Oy.

Structure of the arrangement and key terms of the deal

The shares of the company's main shareholders Rouhee Group Oy and Toni Paloniemi, i.e. approximately 83.5% of the company's share capital, will be acquired from Aitio Finland Oy through a share exchange, while the remaining shares will be owned by the company's employees. The valuation of the shares to be acquired through a share exchange is approximately EUR 5.3 million. Hillava Oy's share capital will be acquired in full by Admicom Finland Oy for a purchase price of approximately EUR 2.5 million and the purchase price will be paid in cash. Ownership and management of acquired shares in Aitio Finland Oy and Hillava Oy will be transferred to the buyer on 22 December 2022.

The offer related to the share exchange of Aitio Finland Oy will be implemented on 22 December 2022. A total of 61,287 Admicom Plc shares will be allocated to Rouhee Group Oy and Toni Paloniemi. The subscription price of the shares corresponds to the average price weighted by trading volumes of Admicom Oyj's share from 1 October to 21 December 2021 at EUR 86.69. The new shares to be issued correspond to approximately 1.2% of the number of shares issued prior to Admicom Oyj's directed issue. The shares to be transferred are subject to lock-ups that are gradually lifted over a period of 6 years from the date of signature. In addition, Admicom Oyj has the right to redeem the shares that remain in ownership of Aitio Finland Oy's employee shareholders. The intention is that the employee shareholders will remain shareholders of Aitio Finland for at least three years.

Admicom's interim CEO Petri Aho:

”I am very happy to be able to announce the acquisitions of Aitio Finland and Hillava at the end of the first year of our strategy period. They support Admicom’s growth strategy and core expertise excellently. As part of our ongoing strategy work and acquisition process, we have identified significant investment opportunities for new products, to strengthen the market leadership and growth of our current product portfolio, and to ensure technological competitiveness. Aitio Finland's and Hillava's expertise in software products and in engineering and installations, construction, and industrial manufacturing software verticals complements Admicom's and Tocoman's expertise brilliantly, and together we can take the development of our software solutions forward more quickly, take advantage of the growth opportunities we have identified and improve the customer experience. I warmly welcome Aitio Finland and Hillava's customers and staff to the Admicom family.”

Thomas Raehalme, CEO of Aitio Finland Oy and main owner of Rouhee Group Oy:

"We are very excited to be involved in developing the most comprehensive and advanced software solutions in the industry as part of Admicom. I believe that our high-quality and versatile expertise will provide excellent support for Admicom's product development and also open up new opportunities for the future. At the same time, we are also able to offer our developers even more interesting challenges to solve."

Ville Miettinen, CEO of Hillava Oy:

"Now, as part of the Admicom Group, Hillava's growth story continues and develops. It is really great that together we can enable customers in our target industries broader service and solution portfolio.”

Strategic objectives of the acquisition:

• Acquisitions significantly increase Admicom Group's R&D resources and critical technological know-how, thus strengthening the company's long-term competitiveness, continuity and market potential.
• Acquisitions increase Admicom's integration capability, thus open up new opportunities for acquisitions, partnership development and ecosystem expansion.
• As a result of the transaction, the Admicom Group will expand its product and service offerings and customer base, especially in mobile workforce related ERP solutions in strategic core industries engineering and installations and construction.
• Acquisitions support Admicom in achieving the financial targets for the current strategy period and in long term. Admicom's financial target for the 2021-2023 strategy period is, on average, a growth of more than 20% in net sales and a profitability of 40-50% measured by EBITDA.

Financial and business model impact of the acquisition:  

The acquisition will have no impact on Admicom's guidance for 2021. The company will refine the impact of the acquisition on Admicom Group's net sales and profitability development for 2022 in connection with the financial statements release.

In the short term, Aitio Finland's and Hillava's business will continue as before. However, Admicom aims to make full use of Aitio Finland's developer resources after the end of the integration/transition period, which will last from 2022 to 2023, to strengthen the company's own product development and value creation capability. In practice, this means that the share of external invoicing in Aitio Finland's business will decrease gradually and Admicom Group's share of invoicing will increase over time accordingly. Hillava Oy's business, customers and services will continue and be reported as part of Admicom Finland Oy's business and service offering starting from December 22nd, 2021.

Key indicators of Aitio Finland Oy's income statement and the balance sheet for 2019-2020

(incl. Hillava Oy's business operations, which were divided into a separate company from Aitio Finland Oy as of the beginning of 2021):

EUR 1 000		2020		2019
Revenues		2 280		1 865
Operating result		577		328
EBITDA		582		360
Equity ratio, %		65,3		62,8
Total equity		682		506
Balance sheet total		1 044		806

 

Admicom Oyj
BOARD OF DIRECTORS

Additional information:

Petri Aho
Interim CEO, CFO
petri.aho@admicom.fi
+358 44 724 1767

Approved advisor:

Oaklins Merasco Oy
+358 09 612 9670

Admicom Oyj Admicom, established in 2004, is a Finnish forerunner and provider of cloud-based ERP solutions for construction, building services engineering and manufacturing companies and a comprehensive partner in software and accounting services. The Company’s cloud-based SaaS ERP solution Adminet helps small and medium-sized companies enhance their competitive advantage by automating manual processes of production site and office seamlessly all the way to accounting.

The cost calculation and the production management software developed by our daughter company Tocoman Oy have a long history and a stable position on the market. Combining the product strengths of Tocoman with the strengths of Adminet creates by far the most extensive cloud-based solution for the construction industry.

The Company employs more than 190 professionals in Jyväskylä, Helsinki, Tampere, Oulu, Seinäjoki and Turku. Further information: https://investors.admicom.fi/