NKT expands offering with takeover of power cables firm SolidAl

Danish power cable manufacturer NKT A/S (CPH:NKT) announced it is expanding its production capacity and geographic presence with the EUR-192-million (USD 206.0m) acquisition of SolidAl, a Portuguese peer specialised in medium- and high-voltage cables.

Founded in 1970, SolidAl offers power cables ranging from 1 kV to 225 kV and has a factory footprint of 70,000 square meters (753,473 sq ft). Present in France, the UK, Ireland, Spain and Portugal, the business reported a revenue of about EUR 150 million and about EUR 20 million in earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2023.

The inorganic growth investment supports NKT’s growth strategy and will increase medium- and high-voltage capacity up to 225 kV. It will also add an established production footprint in Southern Europe amid high demand fueled by grid modernisation and renewables interconnection on the continent, the buyer said.

As part of the deal, NKT has committed to investing an additional EUR 50 million to expand the medium- and high-voltage capacity at SolidAl’s existing site, with the new production capacity anticipated to be operational in 2027.

SolidAl was acquired from Njord Partners. The value of the deal, which is in enterprise terms, implies an EV/EBITDA multiple of 9.4x.

“SolidAl will complement the competitiveness of the product mix from NKT’s existing factories in Asnaes, Velke Mezirici and Cologne focusing on delivering the full range of power cables for the grid at a larger scale,” NKT’s chief executive Claes Westerlind said in a recent press statement.

(EUR 1 = USD 1.073)

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