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Volution expands Nordics footprint with acquisition of Finnish firm

Published: 09:37 06 Jul 2018 BST

Air conditioning fan
An additional cash payment of €2mln is also payable contingent on Pamon’s earnings

Volution Group PLC (LON:FAN) has expanded its presence in the Nordic region with the acquisition of Finnish firm Oy Pamon Ab.

The ventilation product manufacturer said the €11.5mln (£10.2mln) acquisition would be funded from existing cash reserves and banking facilities, with an additional cash payment of €2mln (£1.8mln) payable contingent on Pamon’s earnings for the 2018 and 2019 financial years.

Volution added that the acquisition would expand its presence into the regulatory driven Mechanical Ventilation with Heat Recovery (MVHR) new-build commercial sector in Finland and more generally in the Nordics.

Ronnie George, Volution chief executive, said: “This acquisition is consistent with our stated strategy of making selective value adding acquisitions. Pamon has a strong presence in the Finnish new build ventilation market. The business will be highly complementary to our position in the Nordics providing us with an enlarged presence in the new build sector in Finland and the Nordics, in the growing and regulatory driven market for MVHR units.”

In a note to clients, analysts at City broker Liberum commented: “Volution has now made 12 acquisitions since 2012 for a consideration of £136m, of which nine (for around £100m) have been made since the IPO. The mature acquisitions are reported to be making 24% ROIC [return on invested capital], with returns highest in the Nordic region (45%).

They added: “We believe that Volution is undervalued as a highly profitable industry leader, successfully reinvesting strong cash flows in a fragmented industry.”

In early morning trading Friday, Volution shares were up 2.5% at 204p.

--Adds broker comment--

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