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Austria’s S&T AG to acquire Iskratel Group for €37.5mn for industrial IoT skills

July 6, 2020

Posted by: Anasia D'mello

S&T AG has agreed to acquire the Iskratel Group for €37.5 million. Based in Kranj, Slovenia, Iskratel is a European ICT provider for digital transformation of the telecoms, transport, public safety and energy industries.

Headquartered in Linz, Austria, S&T AG is a supplier of IT systems in Central and Eastern Europe, and of associated services and solutions. The technology group employs some 4,900 people and operates in 32 countries around the world.

In 2016, S&T took a stake in Kontron AG, a provider in embedded computing, which enhanced its portfolio of proprietary technologies used in appliances, cloud security, software and smart energy. That acquisition enhanced S&T’s position as an international supplier of Industry 4.0 and Internet of Things (IoT) technologies.

The companies see synergies for their future development and success, especially in industrial IoT (IIoT) software and 5G applications, which complement and strengthen the S&T product range. The acquired 5G know-how and the solutions based on it can be combined with established S&T products in the smart industry sector, such as SusieTec. The roll-out of 5G equipment on high-speed trains can also be advanced while strengthening the transport business. This is an area where the S&T Group has already implemented joint projects with Iskratel in Slovenia.

Further synergies will open up in areas such as sourcing, manufacturing and sales, with S&T providing Iskratel with access to the Western European market. In return, S&T can draw on Iskratel’s employees and excellent long-term reputation in the Adriatic region and Eastern Europe.

Hannes Niederhauser, CEO S&T AG comments, “We have been following 5G developments for a long time, have identified applications ready for this technology, and expect to gain an advantage by strengthening our 5G product portfolio. Due to our synergies we will be able to increase Iskratel’s results to over 10% of EBITDA within the next 2 years. With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains.”

Zeljko Puljic, CEO of Iskratel says, “The Iskratel Group has made a very clear and ambitious strategic plan which will be much more efficiently realised through numerous synergies within S&T AG. Faster portfolio development and market penetration, especially in areas of IIoT and 5G solutions, safe and smart communities, virtualisation of access and core communication networks will be enabled through a stronger combined innovation and know-how, sourcing and sales network. We are also increasing human capital, which we continue to recognise as a crucial element in further success.”

In 2019, with 900 employees, the Iskratel Group generated sales of €115 million and a slightly positive result. The fixed purchase price of €37.5 million corresponds to a revenue multiple of around 0.35. Variable purchase prices were also agreed depending on future profit developments. The transaction is scheduled to close in autumn 2020, once all the official approvals have been obtained.

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