Doro: Welkom Netherlands - ABG

Acquires Innocom for SEK 72m (1.4x 2020 EV/s)
Marks its first acquisition in the Netherlands
Doro continues to consolidate the fragmented market

This morning, Doro announced the acquisition of Innocom, a Dutch provider of Care solutions that was founded in 1998. In 2020, the company generated sales of ~SEK 50m, and it is currently monitoring 26,000 connections. For this, Doro pays SEK 72m, corresponding to a transaction multiple of 1.4x EV/sales. This is slightly above its median historical acquisition multiple of ~0.8x, but in line with the multiple when it entered the UK market and acquired Welbeing. In terms of EV/connection, the ratio is SEK 160/month, which is above previous acquisitions.

After a relatively quiet 2021 in terms of acquisition announcements, today’s news mark Doro’s tenth Care acquisition. We have previously emphasised a fragmented European telecare market, and that Doro should be well-positioned to consolidate the market: both in terms of its financial position and in terms of its group structure (market leader in several markets, and with a high share of digital telecare connections). We reiterate this view, and are encouraged to see that Doro is now expanding geographically into the Netherlands. According to Berg Insight, there are about 270k connections in the Netherlands. As such, Innocom has a relatively strong position in that market (~10% market share), which we think bodes well for more acquisitions in that region going forward. On our unrevised estimates, Doro’s share is trading at c. 10x ‘22e EV/EBIT.

Länk till analysen i sin helhet: https://www.introduce.se/foretag/doro/Equity-research/2021/9/doro---welkom-netherlands/