HMS Networks acquires PEAK-System Technik and strengthens its position within Industrial Information and Communication Technology (ICT)

Core Viewpoint - HMS Networks AB has entered into a binding agreement to acquire PEAK-System Technik GmbH for EUR 69 million, enhancing its position in industrial communication solutions, particularly in the automotive sector [1][2]. Acquisition Summary - The acquisition is valued at EUR 69 million (approximately SEK 780 million) on a cash and debt-free basis [2]. - PEAK-System reported sales of about EUR 25 million for the twelve-month period ending September 30, 2024, with an adjusted EBITDA margin of approximately 30% [7]. - The acquisition is expected to close on November 1, 2024, subject to closing conditions [2]. - Financing for the acquisition will come from existing and new credit facilities, including a EUR 30 million term loan [8]. Company Overview - PEAK-System is a German company specializing in industrial communication solutions, offering both hardware and software, particularly for the automotive industry [3][4]. - The company has been operational since 1999 and employs around 50 people, with sales distributed approximately 50% in Europe, 25% in Asia, and 25% in the US [4]. Strategic Rationale - The acquisition will strengthen HMS' position in communication solutions for advanced engineering tools, testing, and control in automotive, medical, and transportation sectors [5]. - There are expected synergies between HMS' Business Unit Ixxat and PEAK-System, enhancing product development and cross-selling opportunities [5][6]. Financial Implications - Transaction and integration costs are anticipated to be around SEK 10 million, impacting the financials in 2024 and 2025 [7]. - The acquisition is projected to be accretive to HMS' earnings per share from the completion date, excluding non-cash amortization impacts [2][8].