Hexatronic acquires leading microduct business KNET for an expected USD 63 million
November 24 2022 - 1:00AM
Hexatronic acquires leading microduct business KNET for an expected
USD 63 million
Press release November 24, 2022Gothenburg, Sweden
Hexatronic acquires leading
microduct business KNET for an expected
USD 63 million
Hexatronic Group AB (publ) (“Hexatronic”) has entered into a
definitive agreement to acquire KNET CO., LTD (“KNET”) - one of the
global leaders within microduct solutions for the telecommunication
industry - for an expected enterprise value of USD 63 million.
KNET
KNET is a global leader and pioneer in the development and
manufacturing of microduct solutions for the telecommunication
industry. Since 2002 the company has delivered to more than 70
countries on 5 continents. Today the main markets are North America
followed by Europe and Asia.
KNET is headquartered in Seoul and has a manufacturing plant in
Jeongeup-si in the Southern part of South Korea. The company also
has offices in the US and Indonesia. The acquisition also includes
the land and buildings of the production plant.
KNET will post-closing operate as an independent company with
the existing management team and will continue to serve all
existing customers under the KNET brand.
The seller who also is the founder will continue in his current
position as the chairman for KNET.
Overview of the transaction
The purchase price for KNET is a fixed enterprise value of USD
48 million plus a potential earn-out based on the accumulated
EBITDA for the 36-month period post-closing. The potential earn-out
is estimated to USD 15 million.
For the current year, ending December 31st, KNET is expected to
generate an EBITDA of more than USD 10 million. This represents a
fixed transaction multiple of approximately 4.6x and an expected
transaction multiple, including earn-out, of approximately
6.1x.
The maximum earn-out amounts to USD 36 million and is achieved
if KNET performs an accumulated EBITDA for the 36-month period of
more than USD 63 million. If the accumulated EBITDA for the same
period is less than USD 27 million no earn-out will be paid
out.
The fixed purchase price of USD 48 million is to be paid in cash
at closing, fully financed with senior debt. The third quarter pro
forma Net Debt-to-EBITDA ratio for the Hexatronic Group, following
the transaction, including previously announced transactions, is
expected to be about 1,8. The acquisition is immediately accretive
to earnings and is expected to add 0.28 SEK per Hexatronic share on
an annual basis.
The acquisition is expected to close December 1, 2022.
Comments from Hexatronic CEO
“We are very pleased to have reached an agreement to acquire
KNET. We have been working with the highly skilled team of KNET for
more than 10 years and are impressed with the product quality and
innovation capabilities. Throughout the years KNET has been an
important partner to Hexatronic. Both as a volume supplier managing
peaks in demand, but also for products with high technical
requirements. The strong support of KNET has been crucial for our
strong growth and recent success in North America. Hexatronic is
today the largest customer of KNET.
We look forward to welcoming the dedicated team of KNET to
Hexatronic Group. The technical and innovation capabilities will
add great value to Hexatronic. In addition, we will get access to a
high quality and high-volume production plant strategically located
to serve our businesses in North America, Europe and Oceania”, says
Henrik Larsson Lyon, CEO of Hexatronic Group.
Comments from KNET Chairman
"Hexatronic has been a long-term strategic partner to KNET and
it is a natural and exciting development to join Hexatronic Group.
We look forward to continuing to support all our existing customers
as well as Hexatronic’s ambitious growth aspirations in its key
markets”, says Seo Seong Nam, founder and Chairman of KNET.
AdvisorWhite & Case and Shin & Kim has
acted as legal counsels for the acquisition of KNET.
Gothenburg, November 24, 2022
Henrik Larsson LyonCEO Hexatronic Group
For more information, please
contact:Henrik Larsson Lyon, CEO
Hexatronic Group, +46 706 50 34 00Pernilla Lindén, CFO
Hexatronic Group, +46 708 77 58 32
This is information that Hexatronic Group AB (publ) is obliged
to make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact person set out above, at 07:00 CET on 24 November 2022.
This is a translation of the Swedish version of the press release.
When in doubt, the Swedish wording prevails.
Hexatronic creates sustainable networks all over the world. We
partner with customers on four continents – from telecom operators
to network owners – and offer leading, high-quality fiber
technology for every conceivable application. Hexatronic Group
(publ.) was founded in Sweden in 1993 and the Group is listed on
Nasdaq OMX Stockholm. Our global brands include Viper, Stingray,
Raptor, InOne, and Wistom®.
- 2022-11-24 Hexatronic acquires leading microduct business KNET
for an expected USD 63 million
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