July 1 (SeeNews) - Austrian high-tech firm S&T said it has signed a deal to acquire Slovenian information and communications technology (ICT) provider Iskratel Group at a fixed purchase price of 37.5 million euro ($42 million).
The fixed price is equivalent to a revenue multiple of around 0.35, as the two parties have also agreed variable purchase prices depending on future profit developments, S&T said in a statement on Tuesday.
You can subscribe to our M&A newsletter here
The transaction is expected to be closed in the autumn after it obtains all necessary approvals.
"With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains," S&T CEO Hannes Niederhauser said in the statement.
"We have been following 5G developments for a long time, have identified applications ready for this technology, and expect to gain an advantage by strengthening our 5G product portfolio. Due to the synergies we will be able to increase the Iskratel result to over 10% EBITDA within the next 2 years," he added.
The Austrian company noted that Iskratel's developments in Industrial Internet of Things (IIOT) software, and 5G applications in particular, will complement and strengthen the S&T product range.
It added it has already implemented joint projects with Iskratel in Slovenia in the area of the roll-out of 5G equipment on high-speed trains, where there is still room for progress in order to strengthen the performance of the transport business.
"Further synergies will open up in areas such as, sourcing, manufacturing and sales, with S&T providing Iskratel access to the Western European market. In return, S&T can draw on approximately 500 cost-efficient software engineers and excellent long lasting Iskratel’s reputation in Adriatic and Eastern Europe," the statement read.
Kranj-based Iskratel Group provides ICT to operators of telecommunications, railway and energy networks, as well as to the industrial automation sector.
It is active primarily in Adriatic and Eastern Europe through its group companies, employing some 900 people. In 2019, it generated sales of 115 million euro and a slight positive result, S&T said without providing a figure for the profit.
($=0.8922 euro)