Innofactor Plc Stock Exchange Release December 22, 2015, at 08:30 Finnish time
With an agreement signed last night, Innofactor has agreed to acquire the entire share capital of the Swedish company Cinteros AB from its management. Cinteros is one of the leading Swedish IT services companies focusing on providing Microsoft Dynamics CRM -based solutions by its over 100 employees. The acquisition supports Innofactor’s Nordic growth strategy and strengthens Innofactor’s position as one of the leading service providers in the Microsoft Ecosystem in the Nordic countries.
Cinteros AB – the No 1 Microsoft Dynamics CRM player in Sweden with an excellent track record of fast and profitable growth
Cinteros is focusing on providing Microsoft Dynamics CRM -based solutions supporting the entire business process in selected industries such as labor unions and other membership organizations, service companies, educational organizations, real estate, construction and the public sector. The company is highly ranked Microsoft Dynamics CRM Partner in Sweden, and has been awarded as the Microsoft Dynamics CRM Partner of the Year in Sweden for several years. Cinteros’ customers include companies like Svenskt Näringsliv, IF Metall, Kommunal, Vision, Riksbyggen, Scandic and Sodexo.
The net sales for the last fiscal year (January 1 to December 31, 2014) were approximately 7.9 million euros (approximately 73 million SEK), with a 43% growth from previous year. The operating profit (EBITDA) was approximately 0.7 million euros (approximately 6.9 million SEK) and the EBITDA margin was approximately 9%. The net sales for the current fiscal year 2015 is estimated to be approximately 11 million euros (approximately 100 million SEK) and EBITDA approximately 9%. The company employs over 100 people in Stockholm, Gothenburg and Malmö. Cinteros and its financials will be consolidated into Innofactor Group from January 1, 2016.
Purchase price, Payment and Financing
The purchase price will depend on Cinteros’ realized EBITDA during 2016 and the sales growth during 2017. The minimum net debt free purchase price (Enterprise Value) is approximately 2.7 million euros (approximately 25 million SEK) and is paid in Swedish kroner at closing of the deal in January 2016. The rest of the net debt free purchase price of maximum of approximately 5.3 million euros (approximately 49 million SEK) is intended to be paid with Innofactor Plc’s shares in 2017 and 2018. The maximum net debt free purchase price (Enterprise Value) is approximately 8.0 million euros (approximately 74 million SEK). The cash payment to the Sellers’ at closing is estimated to be approximately 2.9 million euros (approximately 27 million SEK) and is intended to be financed partly with a new maximum 2.7 million euros bank loan. 75% of the shares are subject to transfer restrictions which are gradually released during a period of 36 months starting from the date of the purchase price payment in shares.
All four sellers are a part of the acting management of Cinteros who all continue in the Innofactor Swedish management team. CEO of Cinteros’ Robert Erlandsson continues as a managing director of Innofactor Sweden, and becomes Innofactor’s country manager in Sweden and a new member of the Innofactor Group Executive Board.
Cinteros AB will change its name into Innofactor AB in mid-2016 and after that Cinteros’ services will be offered under the Innofactor brand. Integration of Cinteros and Innofactor operations will start immediately and the goal is to implement significant parts of it by the end of year 2016.
Innofactor’s Nordic Growth Strategy Progresses
With Cinteros acquisition Innofactor’s total number of Microsoft based competence and expertise grows to over 500 employees in the Nordic countries. Companies in Sweden, Finland and Denmark have together a strong customer base covering commercial, public sector and third sector customers. Cinteros strengthens Innofactor’s comprehensive Microsoft-based solutions, products and services portfolio in the Nordics. This acquisition will bring significant cross-sales opportunities for Cinteros’ customer vertical based solutions in Finland and Denmark, and on the other hand provide Innofactor’s services in Sweden for Cinteros’ customers. The new Innofactor will also reach more attention from Microsoft on all levels in Sweden, in Western Europe and globally.
“Acquisition of Cinteros is an important step in Innofactor’s Nordic growth strategy and provides an excellent platform to grow a substantial Microsoft-focused business in Sweden and in other Nordic countries. High level of competence and strong customer base of Cinteros complement extremely well Innofactor’s current business operations”, says Sami Ensio , the founder and CEO of Innofactor.
“The demand for Dynamics CRM -based solutions has increased tremendously in recent years in Sweden. We are also excited about the opportunity to expand our offering with other productivity solutions offered by Innofactor, for which we also see significant market potential”, says Robert Erlandsson , the CEO of Cinteros AB, who through the merger will become country manager of Innofactor in Sweden and a member of the Executive Board of Innofactor Group.
Cinteros AB key financials
Cinteros AB's net sales, EBITDA and operating income in the financial periods from January 1 to December 31, 2014 and January 1 to December 31, 2013 were according to Swedish Accounting Standards as follows (thousand euros):
| Thousand euros | Jan 1 to Dec 31,2014 | Jan 1 to Dec 31,2013 |
| Net Sales | 7,850 | 5,570 |
| EBITDA | 685 | 678 |
| Operating Profit (EBIT) | 679 | 663 |
Cinteros AB’s balance sheets on December 31, 2014 and December 31, 2013 were as follows (thousand euros*):
| Thousand euros | Dec 31, 2014 | Dec 31, 2013 |
| Fixed Assets | 70 | 70 |
| Receivables and current assets | 2,883 | 1,996 |
| Total | 2,953 | 2,066 |
| Equity | 1,365 | 841 |
| Liabilities | 1,588 | 1,226 |
| Total | 2,953 | 2,066 |
The currency rate used in the above figures: 1 euro = 9.30 Swedish crowns.
Espoo, December 22, 2015
INNOFACTOR PLC
Sami Ensio, CEO
Additional information:
Sami Ensio, CEO Innofactor Plc Tel: +358 50 584 2029
Briefings concerning the acquisition
On December 22, 2015, at 8:30 Finnish time, Innofactor will hold a briefing concerning the acquisition in Finnish for investors and analysts at Innofactor’s offices in Keilaranta 9, 02150 Espoo, Finland.
During the same day on December 22, 2015 at 11:30 Finnish time, Innofactor will hold a press conference concerning the acquisition in Finnish for the Finnish media at Glo Hotel Kluuvi in Kluuvikatu 4, 00100 Helsinki, Finland.
In both events, the acquisition and its effects will be presented by Innofactor's CEO Sami Ensio and Chairman of the Board Ari Rahkonen. The presentations of the briefings will be available on Innofactor's web site after the briefings. Admission to both events is free.
Innofactor will also hold a conference call in English for analysts, media and investors on Tuesday, December 22, 2015, at 16:00 Finnish time. Registrations to ir@innofactor.com before 14:00 Finnish time on Tuesday, December 22, 2015.
Distribution:
NASDAQ OMX Helsinki Main media www.innofactor.com
Innofactor Innofactor is one of the leading Nordic IT solution providers focused on Microsoft platforms. Innofactor delivers business critical solutions and maintenance services as a system integrator and develops its own software products and services. Innofactor’s own product development is focused on Microsoft -based cloud solutions. Innofactor's customers include over 1,000 private and public sector organizations in Finland, Denmark, Sweden, and elsewhere in Europe. The company has over 400 (over 500 in Jan/2016) motivated and skilled employees in several locations in Finland, Denmark and Sweden. From 2010 to 2014, Innofactor's annual net sales growth has been 45% on average. Microsoft has named Innofactor Plc as the Finnish Partner of the Year in 2015. Innofactor was also selected into the Microsoft’s international finals in two categories. The Innofactor Plc share is listed in the technology section of the main list of NASDAQ OMX Helsinki Oy. www.innofactor.com
Cinteros Cinteros is focusing on providing Microsoft Dynamics CRM -based solutions supporting the entire business process in selected industries such as unions and other membership organizations, service companies, educational organizations, real estate, construction and the public sector. The company has over 100 motivated and skilled employees in three locations in Sweden. From 2010 to 2014, Cinteros’ annual net sales growth has been 19% on average. The company is highly ranked Microsoft Dynamics CRM Partner in Sweden, and has been awarded as the Microsoft Dynamics CRM Partner of the Year in Sweden for three consecutive years. Cinteros’ customers include large Swedish organizations both in public and private sector, including companies like Svenskt Näringsliv, IF Metall, Kommunal, Vision, Riksbyggen, Scandic and Sodexo. www.cinteros.se
