Prevas - Enters a new phase with Enmac - ABG

Cultural and customer similarities bode well
Prevas has received regulatory clearance for its acquisition of Enmac, a Finnish technology consultant with a focus on process and production development. It will be consolidated from 1 July and add roughly 200 FTEs, taking the Prevas Group to around 1,100 employees in total. We like the profile of Enmac, as it has shown solid sales growth with high profitability. In addition, its customers are well-known Finnish companies with the majority in the manufacturing industry. There also seems to be a cultural fit, with Enmac's focus on decentralised decision-making and customer satisfaction similar to that of Prevas. Overall, we think Enmac is a good fit and that the integration process will be smooth.

A new market creates new ways to grow
We think Prevas is making a sound strategic decision to enter the Finnish market with an established and well-run company, as it creates a solid base to pursue the market from. We think Enmac has solid organic growth potential in Finland, and will also create new possibilities to find additional M&A targets on the Finnish market. In addition, its expertise in process- and production development can be used for cross-selling purposes in Prevas' existing customers base in Sweden. We have included Enmac in our numbers and raise '25e sales by 17% an EPS by 10% as a result.

Revised fair value range of SEK 134-191 (122-172)
We raise our fair value range to reflect the acquisition of Enmac. The pro-form sales of both companies for 2023 was SEK 1.7bn, with a 12% EBITA margin. The profitability is among the best in the industry. The share is still trading 35-40% lower on '24e EV/EBIT compared to key peers.

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