Skarta Group Plc is merging with the Swedish NYAB Group to increase the pace of building a cleaner future


Skarta Group plc, builder of a cleaner future, acquires the Swedish NYAB Group, whose profitability has been among the best in the industry. Through the deal, a new Skarta NYAB Group will be formed and it will achieve a turnover of almost EUR 300 million for next year. The new Skarta NYAB Group will be one of the most important players around the Gulf of Bothnia and in the Norrbotten region, where more than one hundred billion euros will be invested in green conversion in the coming years. The region also plays an important role in the future hydrogen economy.

Skarta Group plc, builder of a pure future, has today, December 16, 2021, signed a share exchange agreement according to which Skarta acquires all shares in Swedish NYAB Sverige AB. NYAB Sverige AB is the parent company in a group that focuses on infrastructure as well as industrial and specialized construction. The group also includes the company's wholly owned subsidiaries NYAB Infrastruktur AB and NYAB Mälardalen AB.

The compensation for the shares in NYAB Sverige AB according to the share exchange agreement is EUR 210 million, of which EUR 140 million will be paid through a directed new issue to the shareholders in NYAB Sverige AB and EUR 70 million will be paid as cash payment. 288,397,790 new shares in Skarta Group plc, which corresponds to the current number of shares in the company, will be issued in the private placement, ie the exchange ratio is 1: 1. The share issue will be paid out via non-cash assets through shares in NYAB Sverige AB. The cash payment is intended to be financed through debt financing, for which the parties have entered into negotiations with potential creditors. The size of the cash payment can be revised before it is confirmed that the conditions for the transaction are met.

The implementation of the transaction is a dependent decision at Skarta Group plc's Extraordinary General Meeting on the rights issue addressed to NYAB Sverige AB's shareholders and approval of the transaction, approval from the Swedish Competition Authority, financing arrangements for the transaction and a review of due diligence regarding both parties. in January – February 2022, subject to the closing conditions.

At the Extraordinary General Meeting, the intention is for Skarta Group Plc to change its name to Skarta NYAB Plc and for its Board of Directors to be strengthened with members proposed by NYAB Sverige AB's current shareholders. The company will continue to have its headquarters in Oulu and Tuomas Hirvonen will continue as CEO.

The new group will be one of the largest players in the Gulf of Bothnia area

Through the deal, Skarta's resources will increase significantly and its expertise will increase, especially in the Norrbotten region, which is a significant market area for both companies. The planned investments in carbon dioxide-free industry and infrastructure in the area in the coming decades will amount to more than one hundred billion euros.

The deal also gives Skarta an excellent opportunity to expand its operations in clean energy in Sweden and expand to become a significant builder of a cleaner future around the entire Gulf of Bothnia. Skarta has concentrated more and more on extensive energy building projects and project development has started in a positive way in both wind and solar energy. Both the Norrbotten area and the Oulu region, where Skarta is a strong player, are also important places for the future hydrogen economy, and through the deal, Skarta will have the resources to implement more concrete measures to build up a hydrogen economy.

The new Skarta NYAB Group will achieve sales of almost EUR 300 million and more than 300 employees in Finland and Sweden. The Group's equity will increase to approximately EUR 190 million through the transaction, which after the financing arrangements related to the transaction will correspond to an equity / assets ratio of over 60 percent. The company will provide more accurate financial guidance for the year 2022 at the latest in the financial statements for 2021.

“The merger of Skarta and NYAB is an important milestone in our strategic path forward. NYAB's operations are characterized by rapid growth, good profitability and excellent cash flow. The main markets for the company in northern Sweden and Stockholm are growing markets driven by investments related to clean energy and urbanization. All of this fits our visions very well and gives us a unique opportunity to achieve our financial goals set for the year 2024 already during the next financial year. ”, comments Tuomas Hirvonen, CEO of Skarta Group Plc.

Swedish markets will make up approximately 70 percent of the new Skarta NYAB Group next year. Exchange rate fluctuations therefore have a greater effect on Skarta Group plc's operations than before. The company is also investigating the possibilities of listing its shares on a Swedish marketplace in 2022.

The NYAB Group's operations are mainly similar to the Skarta Group's current operations. Consequently, no major changes occur in terms of risks related to the Group's business operations due to the transaction. Risks related to business operations are typical industry-related risks that relate to, for example, quotation calculation, project management, material prices, occupational safety and personnel resources. The NYAB Group usually has a project management role in its operations, in which case the subcontractors also have a significant impact on their position.

“Both Skarta and NYAB are entrepreneurial consortia and their operations can be described in words such as flexibility and agility. Our merger creates a strong entrepreneurial group that has a significant position in energy construction in northern Finland and northern Sweden, green conversion and development of the hydrogen economy. Our common goal is to be the most profitable company in the industry and to create long-term value for both our customers and our shareholders. ”, says Markku Kankaala, Skarta Group plc's Chairman of the Board.

The largest shareholders in Skarta Group plc after the transaction, based on the holdings at the date of signing the share exchange agreement, would be the following:

- Holding Investment Förvaltning Luleå AB: 27.8 %

- Andament Group Oy: 23.4 %

- Säthergrens Entreprenad AB: 9.0 %

- Laisdalen Konsult AB: 6.1 %

- Mininvest Oy: 4.6 %

- Oy Haapalandia Invest Ltd: 3.9 %

- Mikael Sidér: 3.8 %

- Mitteo Holding AB: 2.9 %

- Granljung Holding AB: 2.9 %

- Pekka Niskanen: 2.8 %

The shareholders in NYAB Sverige AB have undertaken to lock up to 50 % of the shares in Skarta Group Plc subscribed for in the private placement. The lock-in period will be 12 months from the closing of the share exchange.

The NYAB Group has been among the best in the industry when it comes to profitability

The NYAB Group has grown rapidly in recent years. Profitability, combined with organic growth, has been among the best in the industry. Both the Group's revenues and operating profit almost quadrupled during 2016–2020 and showed profitable annual growth since 2013. The Group's estimated sales for 2021 amount to almost EUR 150 million. Adjusted EBITDA is estimated at approximately EUR 20 million and EBIT at more than EUR 16 million. The Group has an all-time high order backlog that includes many multi-year contracts, due to which the estimated turnover for 2022 exceeds EUR 170 million and estimated EBIT exceeds 10 percent.

The NYAB Group operates throughout Sweden in its core operations: earthworks, infrastructure and specialized construction. The customers are in both the private and the public sector. The Group's head office is located in Luleå. NYAB has offices in Stockholm and in six different locations in northern Sweden, a new office in Gävle will open in January. A total of 160 employees work in the group.

“The merger with Skarta strengthens NYAB in its continued growth journey very well. Demand for our services in special construction in northern Sweden due to investments related to clean energy production will increase in the coming decades. Skarta has experience of design and projects in clean energy production, local expertise in the Norrbotten area and good insights into smart and clean construction, locally produced renewable energy and hydrogen. Together, we have even better opportunities to expand profitably in a very interesting market area and to expand in the value chain for clean energy by developing and owning projects ", comments Johan Larsson, founder and CEO of NYAB Sverige AB.

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