Alcadon - Major acquisition of 6X International

Acquires leading Danish distributor for 4. 1x EV/EBITDA Adds c. 33% to ‘21e sales and EPS Value creating acquisition with added potential Alcadon to acquire 6X International Today, on December 28, Alcadon announced the acquisition of 6X International, a leading niche-distributor of fiber and network infrastructure based in Denmark and Germany. This is a complementary acquisition, which strengthens its geographical presence, and should offer synergies given the operational similarities.

Last FY, 6X had revenues of SEK 171m, for an EBITDA margin of 11%. This adds c. 33% and c.

28% to sales and EBITDA to the group in ‘21e, respectively. Management expects the company to add c. SEK 0.

75 to CEPS for ‘21e, pre synergies, implying a 33% increase to ABGSCe. Acquisition done at 4. 1x EV/EBITDA The purchase price on a cash and debt free basis amounts to SEK 75m, implying an EV/EBITDA of c.

4. 1x pre-synergies. We think this is an attractive valuation, below Alcadon’s own valuation at 8.

4x for ‘21e. Net debt should increase by c. SEK 50m, increasing net debt/EBITDA to a modest 1.

8x for ‘21e, leaving headroom for additional acquisitions. Impressive deal at an attractive price The acquisition of 6X is without doubt value creative, providing a good fit with Alcadon’s existing business. Synergies are likely and the acquisition adds growth potential in new larger markets.

Alcadon currently trades at c. 6. 6x EV/EBITDA on pro forma ‘21e numbers, compared to 8.

4x on pre-acquisition numbers.