Koskisen Corporation, inside information, 10 March 2025, at 09:00 a.m. EET
Koskisen Corporation has agreed to acquire the business operations of Iisveden Metsä Oy. Located in Suonenjoki, Iisveden Metsä is a company mainly owned by private individuals and it produces approximately 140,000 m3 of spruce sawn timber per year. Iisveden Metsä Oy was founded by local forest owners in 1924.
The transaction will be carried out as a business acquisition, including, with certain limited exceptions, the entire business of Iisveden Metsä, including the factory property located in Suonenjoki with machinery and equipment, as well as inventories. The personnel of Iisveden Metsä, approximately 50 people, will be transferred to Koskisen as "old employees". The transferred business does not include the target company's receivables, cash and cash equivalents or other financial assets or liabilities.
Iisveden Metsä's revenue (unaudited) in 2024 was EUR 52.7 million (EUR 52.5 million in 2023, audited) and EBITDA (unaudited) in 2024 was EUR 1.4 million (EUR 0.5 million in 2023, audited).
The book value of the balance sheet items to be transferred was approximately EUR 24.9 million (unaudited) at the end of 2024.
If completed, the transaction will increase Koskisen's revenue and EBITDA. The transaction is expected to create synergies in raw material sourcing, especially for birch logs, thus supporting the organic growth and profitability of the Panel Industry. The transaction will also have positive effects on the production efficiency and the optimisation of market-specific concepts of Sawn Timber Industry. The completion of the transaction is currently not expected to have an impact on Koskisen's profit guidance for 2025.
"The acquisition of the business operations of Iisveden Metsä is a key part of Koskisen's sustainable growth strategy, according to which we aim to increase the Group's revenue to EUR 500 million by the end of 2027 through organic and inorganic growth. Once completed, this acquisition will support both goals: it will directly increase the revenue of Sawn Timber Industry by about one-third, while ensuring the availability of raw materials and enabling organic growth in Panel Industry," says Koskisen's CEO Jukka Pahta.
Pahta sees several synergy benefits in the acquisition. Iisveden Metsä is a strong and significant local company whose customers and target markets complement Koskisen's customers and markets in an optimal way. Both companies are focused on premium quality and price markets in Japan and Italy, for example. Going forward, the common goal is to efficiently procure wood raw material for the sawing business, but also increasingly birch for the needs of Panel Industry. Iisveden Metsä's wood procurement area is good from the point of view of birch procurement, which excellently supports the growth of Panel Industry.
"By consolidating our sawing businesses, we will be able to create even more value for our customers: we will be able to better allocate market-specific product concepts and centralise them to the most suitable production plant. Iisveden Metsä has its own wood procurement organisation, which we will be able to develop as part of Koskisen's wood procurement. Iisveden Metsä's procurement area is a very good geographical fit for Koskisen's current procurement area," says Tommi Sneck, Director, Sawn Timber Industry at Koskisen.
As a result of the acquisition, Koskisen's annual wood procurement volume will increase to approximately 1,900,000 m3 (of which Iisveden Metsä's share is approximately 400,000 m3) and sawing capacity to approximately 540,000 m3 (of which Iisveden Metsä's share is approximately 140,000 m3).
Key terms and conditions of the transaction
The debt-free purchase price of the transaction is EUR 22.5 million and its cash part will be adjusted at the time of the completion of the transaction by a net working capital adjustment, which is not expected to be significant. In addition, Koskisen will pay the seller a maximum earnout of EUR 4 million if the conditions specified for the payment of the earnout, mainly related to sales price of sawn timber, are met during 2025-2027. Any earnout price will be paid during the first half of 2028.
The purchase price will be paid partly in new Koskisen shares and partly in cash upon the completion of the transaction. In the share issue directed for the seller, Iisveden Metsä Oy, 1,000,000 new Koskisen shares, corresponding to approximately 4.3 percent of all the shares of Koskisen, will be transferred to the seller as consideration shares as part of the purchase price. The subscription price of the consideration share in the transaction is EUR 7.3 per share. The subscription price has been determined based on the negotiations between Koskisen and Iisveden Metsä and takes into account the volume-weighted average price of Koskisen's share before signing of the transaction. The volume-weighted average price of Koskisen's share on public trading on Nasdaq Helsinki Ltd was EUR 7.13 three months before signing of the transaction, EUR 7.03 six months before signing of the transaction, EUR 7.10 nine months before signing of the transaction and EUR 7.07 twelve months before signing of the transaction. If the consideration shares are not entitled to dividend in 2025, the amount of dividend per share possibly resolved by the General Meeting will be deducted from the subscription price of the consideration share and will be added to the cash part of the purchase price. The cash part of the purchase price to be paid at completion of the transaction, estimated at approximately EUR 15.2 million is financed using Koskisen's existing cash and cash equivalents. Any earnout will be paid in cash.
Iisveden Metsä is committed to a transfer restriction for 15 months from the completion of the transaction, during which the consideration shares may not be transferred.
The completion of the transaction requires the approval of Finnish and Estonian competition authorities, approval by a qualified majority at the Annual General Meeting of Iisveden Metsä and the fulfilment of certain other ordinary closing conditions. Koskisen expects the transaction to be completed during the first half of 2025.
For further information:
Sanna Väisänen, Director of Sustainability and Communication, Koskisen Corporation
sanna.vaisanen@koskisen.com
tel. +358 20 553 4563
A wood-wise pioneer of sustainable wood processing, Koskisen is known for its quality sawmill and panel industry products. We utilise valuable wood raw material down to the last particle of sawdust. We manufacture high-quality and sustainable biocircular products that bind carbon for decades. The Group's revenue in 2024 was EUR 282 million. Read more: koskisen.fi
