Hexatronic enters the data center market through US acquisition
Hexatronic Group AB
(publ)
556168-6360
Press Release
September
22,
2021
Hexatronic enters
the data
center market through US
acquisition
Hexatronic Group AB (publ) (“Hexatronic”) has today signed an
agreement to acquire 100% of the shares of Data Center Systems
(“DCS”), based in the US. DCS provides end-to-end fiber
connectivity solutions to the US data center market. DCS is
expected to generate an EBITDA of approximately USD 3 million in
2021. Including a tax benefit of approximately USD 2,5 million
resulting from the transaction, the total effective enterprise
value will be USD 17.2 million up to USD 19.9 million including the
performance-based consideration.
Data Center
SystemsWith 20 years in the US data center market
DCS is well established. DCS provides complete fiber connectivity
system solutions including infrastructure design solutions,
installation and managed services. DCS manufactures reliable,
scalable, high-performance standard and customized structured
connectivity solutions primarily for the data center market.
Customers are mainly telecom, financial and technology companies.
DCS was founded in 2002 and has more than 100 employees as of
today. The headquarter and production facility are located in
Texas, US. The seller of DCS, Kevin Ehringer, will remain as
CEO.
Valuation and
financingHexatronic and DCS will make a joint election
under Section 338(h)(10) of the Internal Revenue Code, permitting
the transaction to be treated as an asset purchase for tax
purposes. The effective enterprise value, taking into account the
tax benefit, represents an implied EBITDA transaction multiple of
5.7x to 6.6x.
The acquisition is financed by a senior bank loan from Danske
Bank. Net debt/EBITDA for Hexatronic Group including completed
acquisitions is expected to be approximately 2.0x. With the
acquisition of REHAU Telecom, that is expected to close in the
fourth quarter of 2021, the Net debt/EBITDA is expected to be
approximately 2.6x.
The acquisition is subject to customary closing conditions and
is expected to close early October.
Comments from
Hexatronic’s CEO“We are very
pleased to welcome the team of DCS to Hexatronic Group. A highly
skilled team dedicated to a consultative approach to ensure the
best network performance possible. They also share our view of the
value of providing complete system solutions and has taken it one
step further by adding several services.
With DCS, Hexatronic enters the US market for data centers that
is expected to experience continued growth. Ever increasing data
traffic as well as the trend towards edge computing increase the
need for both larger hyperscale data centers as well as small and
mid-sized data centers closer to the edge.
The US is today Hexatronic’s largest market, and one of three
strategic growth markets. With the acquisition of DCS we are now
able to provide customers with locally assembled and terminated
products for Hexatronic’s complete FTTH-solution, which will
shorten turnaround times and increase flexibility, and on top of
that offer DCS’s expertise in assembly design and advisory service.
DCS’s production in the US will complement our current connectivity
productions in Sweden, Estonia and the UK,” says Henrik Larsson
Lyon, CEO of Hexatronic Group.
Comments from DCS’s
CEO“Joining the Hexatronic group is a huge step towards
DCS fulfilling our vision to be the worldwide leader of storage and
network connectivity for large enterprise class data centers,” says
Kevin Ehringer, founder and CEO of DCS.
Advisor White & Case Advokat AB has acted
as legal counsel to Hexatronic in the transaction.
Gothenburg, September 22, 2021
Henrik Larsson LyonCEO Hexatronic Group
For more information, please contact:
Henrik Larsson Lyon, CEO Hexatronic Group, +46 706 50 34
00
Pernilla Lindén, CFO Hexatronic Group, +46 708 77 58 32
The information was submitted for publication, through the
agency of the contacts set out above, at 7pm CET on September 22,
2021.
Hexatronic Group AB (publ) is a group that develops, markets and
delivers products, components and system solutions with the main
focus on the fiber optic market. Hexatronic offers a wide range of
innovative system and product solutions mainly for passive fiber
optic infrastructure with global trademarks like Matrix, Viper,
Stingray, Raptor, InOne, Drytech™, Lightmate®, Skyline and Wistom®.
The Group has its headquarters in Gothenburg, Sweden and has sales
offices and/or subsidiaries in Sweden, Norway, Denmark, Finland,
United Kingdom, the Netherlands, Italy, Estonia, Latvia, Lithuania,
Germany, China, New Zealand, Australia, US and Canada. The Group is
listed on Nasdaq Stockholm under the ticker HTRO. For more
information, visit https://group.hexatronic.com/en.
- 2021-09-22 Hexatronic enters the data center market through US
acquisition
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