Talenom Plc expands its operations to Sweden, acquires the shares of Wakers Consulting AB and revises its guidance

Talenom Plc, Press release 4 April 2019 at 14.00

 

 

 

Talenom Plc has signed an agreement with the owners of a Swedish, Stockholm-based accounting firm Wakers Consulting AB to purchase all shares of the accounting firm. The purchase price will be partly paid with the shares of Talenom Plc in a share issue directed to the owners of Wakers Consulting AB. Due to the acquisition, the financial outlook of Talenom Plc changes and the company revises its guidance for 2019. 

 

Wakers Consulting AB is a Stockholm-based authorised accounting firm with 30 employees. The net sales of the firm was SEK 27.2 million (EUR 2.6 million) between 1 September 2017 and 31 August 2018. The profitability of the business was good (Operating margin (EBITDA) of SEK 4.0 million (EUR 0.4 million), 14.7 % of net sales) during the accounting period. The purchase price is SEK 27.0 million (EUR 2.6 million), of which SEK 13.5 million (EUR 1.3 million) will be paid in cash and financed through the liquid assets of Talenom Plc. The rest of the purchase price will be paid by issuing new shares of Talenom Plc subscribed in the directed share issue. 

 

The acquisition affects the financial outlook of Talenom Plc and the company revises its guidance for 2019.

 

New guidance for 2019:

The growth rate of the company's net sales is expected to be greater than in 2018 (18.0%, 2018). The operating profit margin (17.5%, 2018) is expected to improve compared to 2018.

 

The previous guidance presented in the financial statements of 4 February 2019 was:

The company's net sales is expected to grow at the same rate as in 2018 (18.0%). The operating

profit margin (17.5%, 2018) is expected to still improve slightly compared to 2018.

 

The operations in Sweden are expected to grow and develop beneficially, which means that the acquisition and the entry to a new market will also be very significant for the company in the long term. The acquisition does not endanger any other operations of Talenom Plc and the company's solvency will remain good.

 

In connection with its half-year report on 2 August 2018, Talenom Plc first announced that it had begun actively examining the expansion of accounting services outside the domestic market. The company's outstanding expertise in sales, processes and technology have been recognised as strong competitive factors also in the Swedish accounting market. 

 

"A thorough and determined preparatory project for internationalisation has been successfully executed through the first phase and we are very satisfied with the outcome. We warmly welcome all of the Wakers' employees to the growing team of Talenom. We managed to find an accounting firm from the desired market, and on top of Wakers' structure and expertise it is possible to build and grow accounting business in accordance with Talenom's core concept. 

 

We will introduce the practises of our organic growth strategy in Sweden and begin active sales work. At the same time we will continuously evaluate the possible utilisation of parts of the accounting production line, which has shown its outstanding efficiency in Finland, also in Sweden. The direct utilisation of both the process knowledge of our service production and the technological knowledge of our own software development in the Swedish market are under active examination", says Talenom's CEO Jussi Paaso.

 

"Wakers Consulting AB is a strong and stable local player in the accounting market of Stockholm. However, in today's changing world we can not stay standstill. The accounting field is currently in a turning point where the automation and digitalisation of operations consolidate the field. In the midst of the change, Talenom is, in our opinion, definitely one of the trendsetters in the field. Talenom has a strong record of technological development, processes of service production and growth. We believe that together with our excellent local knowledge we can become one of the strongest players in the Swedish accounting market", says Christina Söderström, the CEO of Wakers Consulting AB.

 

48 678 new shares will be offered for subscription in accordance with the terms and conditions of the share purchase agreement in the directed share issue. The number of the issued new shares is equivalent to approximately 0.71 per cent of all Talenom's shares before the issue of the new shares.   

 

In accordance with the terms and conditions of the share purchase agreement, the new shares will be subscribed and their subscription price will be considered to be paid with all the shares of Wakers Consulting AB, which are delivered as a contribution in kind, on approximately 2 May 2019. The subscription price of the new shares will be entirely recorded to the reserve for invested unrestricted equity of Talenom Plc. 

 

The decision on the directed share issue is based on a share issue authorisation, which the Annual General Meeting of Talenom Plc granted to the Board of Directors on 26 February 2019. The authorisation entitles the Board of Directors to decide on all of the terms and conditions regarding the share issue and the issue of the special rights entitling to shares, including the right to derogate from the pre-emptive subscription right of the shareholders, for which there has been a weighty financial reason for the company to derogate from. The authorisation may be used for payment of purchase price of a corporate acquisition or for other purposes decided by the Board of Directors. 

 

The shares will be registered in the Trade Register as soon as possible after the share subscription and they will carry shareholder rights as of their registration day. The shares issued in the share issue will be later admitted to trading on the stock exchange list of Nasdaq Helsinki Oy. Once the new shares have been registered, the number of Talenom Plc shares will be 6 952 392 shares in total.   

 

The owners of Wakers Consulting AB, Christina Söderström and Fredrik Waker, will continue to manage the business as employees of Talenom Plc. In connection with the acquisition, a contingent consideration bound to Talenom's three-year price rate development was agreed with the owners. The consideration will not be paid if the defined share price is fulfilled. The amount of the consideration is SEK 0 - 10 million if the share price remains under the defined level. The amount of the contingent consideration decreases if the owners sell their subscribed shares. 

 

 

	9/2017-8/2018		9/2016-8/2017
	SEK	(EUR)	SEK	(EUR)
Net sales	27 160 730	(2 603 672)	25 275 678	(2 422 968)
Personnel expenses	18 345 390	(1 758 619)	16 840 735	(1 614 381)
Other operating expenses	4 827 751	(462 796)	4 558 953	(437 029)
Operating margin (EBITDA)	3 987 589	(382 257)	3 875 990	(371 559)
Depreciations	570 401	(54 680)	843 295	(80 840)
Operating profit (EBIT)	3 417 188	(327 577)	3 032 695	(290 719)

	SEK	(EUR)
Fixed assets	977 530	(93 708)
Inventories	435 384	(41 737)
Receivables	3 704 422	(355 112)
Cash and cash equivalents	770 949	(73 904)
	5 888 285	(564 461)
Capital and reserves	120 778	(11 578)
Trade payables	524 416	(50 271)
Other current liabilities	5 243 091	(502 611)
	5 888 285	(564 461)