On December 12, 2024, HANZA signed an agreement to acquire Leden Group Oy, a leading Finnish contract manufacturer in mechanics with a turnover of approximately SEK 1.1 billion. The acquisition strengthens HANZA’s cluster structure and is an important step in the HANZA 2025 strategy.
Erik Stenfors, CEO of HANZA, comments on the deal here.
How does the acquisition fit into HANZA’s overall strategy and long-term goals?
HANZA is following a strategy called “HANZA 2025”, which aims to increase presence in existing geographies and manufacturing technologies in Europe. The strategy is achieved through a combination of expansion of existing factories, which has recently taken place in Estonia and Sweden, and selected strategic acquisitions. Finland has been identified as a priority growth area and this acquisition is thus included in HANZA 2025.
In addition to fulfilling the strategic goal of strengthening HANZA’s competitiveness in the region, the acquisition adds a customer base without overlap with existing customers, as well as an experienced management team.
“Finland has been identified as a priority growth area”
The acquisition also strengthens HANZA’s cluster in Estonia, partly through a new factory and partly because several customers in the Baltic region are Finnish. Finland – Estonia has a developed trade between the countries.
How is the acquisition financed and how does it affect the company’s financial development?
The acquisition is mainly financed in cash. As the acquisition was planned as an important part of HANZA 2025, HANZA strengthened its financial position for a future deal through a directed share issue in December 2023. This has ensured that HANZA has sufficient financial resources to complete the acquisition without the need for further capital raising.
“The acquisition was planned as an important part of HANZA 2025, through a directed share issue in December 2023, HANZA strengthened its financial position for a future deal”
Leden’s new factory in Oulainen, Finland
The purchase price also includes a small portion of shares, which are valued at a price of SEK 70, which means a premium compared to the share price in the period before the deal (closing price the day before the deal SEK 68.65). The shares are subject to a lock-up.
Going forward, the new and complementary customer base creates opportunities for revenue synergies, including through HANZA’s MIG™ service. Cost synergies are also expected through the implementation of HANZA’s cluster model, an established organizational model within the Group.
The acquisition thus serves as a catalyst for continued profitable growth and is expected to help HANZA achieve its financial targets for 2025: Sales of at least SEK 6.5 billion and a margin of at least 8 percent. Earnings per share, including the new shares, are also expected to increase.
HANZA expects a strong cash flow and a significant debt reduction in 2025.
How will the integration be implemented and is it expected to lead to additional costs?
HANZA uses a proven integration model for acquisitions. This includes a thorough review of the corporate culture prior to a proposed acquisition, with the aim of making the post-deal integration process efficient and smooth.
“Integration costs are expected to be limited and managed without impacting the 2025 financial targets”
Against this background, integration costs are expected to be limited and managed without impacting the 2025 financial targets. The integration time is estimated to be less than one year from closing, which also allows for the rapid realization of synergies and efficiencies.
Are further acquisitions planned in the future?
HANZA has no further planned acquisitions within the framework of the HANZA 2025 strategy. However, acquisitions are a natural part of HANZA’s business model and will be part of the upcoming strategic multi-year plan, which is expected to start in 2026.
