Valuation, commercial due diligence and focused financial due diligence in a small add-on acquisition

Backround

Lounea is a fixed network telecom operator in Southern Finland. Lounea was planning to grow their fiber network business organically, but an opportunity presented itself to acquire a neighboring fixed network. As Lounea had limited experience of acquisitions, external help was needed to manage the acquisition.

VALOR role and results

VALOR took responsibility for the acquisition process. VALOR helped Lounea’s management and board to offer a competitive but value-creating bid for the sellers. Additionally, VALOR was responsible for creating a business plan and assessing the synergies of the joint operations in sufficient detail to ensure a successful acquisition with limited risks. VALOR helped organize juridical due diligence for the target and was assigned to the focused financial due diligence.

As a result, Lounea acquired the add-on network at a valuation of EUR 6 million, and a year after the acquisition, had successfully increased the overall operator business’s EBIT to more than EUR 1.5 million. A large part of the improvement was accounted for by the acquisition.