HusCompagniet A/S (“HusCompagniet”) has signed an agreement to acquire the prefabricated (prefabricated) factory of NVV GmbH and JAWS Holding ApS (“Danhaus”), including an order book of approximately 200 million Danish kroner. The factory is in Esbjerg, Denmark. The closure is scheduled for May 2022.

Company announcement 20/2022

The factory is one of the best automated factories in the Nordic countries and enters this part of the supply chain in Denmark will further strengthen the strategic ambitions of HusCompagniets. Prefab is particularly well suited to more durable new semi-detached constructions such as DGNB certified projects while maintaining the high quality of construction. Additionally, pre-engineered production supports efficient construction time and with the newly acquired factory, HusCompagniet can secure production in our growing semi-detached segment and mitigate supply chain challenges both in subcontractors only for certain materials.

Martin Ravn Nielsen said:

“With this acquisition, we are raising our ambitions for the B2B market, which has already shown its great potential for HusCompagniet in recent years. At the same time, we are strengthening our value chain, so that we become strong in the sales, production and construction phase of semi-detached houses – and this gives us a unique position in the market. We already have our factory in Sweden under the name VårgårdaHus, where we also produce sustainable wooden houses. And with the new factory in Esbjerg, we can benefit from synergies between the factories in terms of know-how, supply, IT, production, etc. »

Strong points

• The transaction represents an enterprise value on a cash and debt free basis of 90 million Danish kroner. The acquisition will be structured as a 100% cash payment financed by an existing revolving credit facility
• The factory is acquired, including the existing order book of approximately 200 million Danish kroner
• The plant will support growing production demand and amplify HusCompagniets’ growing market shares in the twin segment
• With different initiatives, the capacity is expected to increase to around 800 units, so the factory can produce all paired units
• Production will meet sustainable building requirements such as DGNB certified buildings
• Automation and advantages obtained between our Swedish factory and the newly acquired factory
• In-house factory production mitigates supply chain challenges, both for subcontractors and for certain materials

Factory acquired

The factory is in Esbjerg, Jutland in Denmark and constitute approx. 12,000 m². The factory currently produces around 400 units per year. HusCompagniet will be able to deliver throughout the territory Denmark and will be able to utilize maximum capacity with a planned production capacity of up to 800 units per year in more streamlined production.

The plant currently employs 51 blue collar workers and 21 white collar workers. Blue-collar workers are mostly unskilled workers, and therefore prefab production can alleviate the expected future shortage and bottlenecks in the subcontractor market.

Strategic Rationale

Danhaus has a factory for prefabricated products, unique in its Denmark as “in situ” construction (on site) in the normal way of construction compared to most continents Europe where prefab is the norm.

The acquisition of the plant will be a great strategic opportunity for our semi-detached segment. Especially since large pension and real estate funds focus on sustainability. We believe it also supports our efforts to make sustainable construction more efficient and cost effective and therefore drive the sustainability agenda. Another driver is the growing difficulty in finding skilled craftsmen, as the factory mainly employs unskilled labour.

We believe that HusCompagniet can benefit from learnings from our Swedish plant and the newly acquired plant and drive efficient production with scale advantages.

About Danhaus

Danhaus was founded in 1978 with a focus on building energy and environmentally sustainable Danish homes in the German housing market. Over the next 20 years, the business model remained unchanged with the sale of Danish houses to Germany and in 1998 a factory was built in Esbjerg. The factory has since been expanded several times to reach the current size of around 12,000 m2 and around 70 employees. Danhaus houses are built on wooden structures, but the houses can be equipped with brick, slate or wooden facades. Danhaus sold the German part of the business in 2021 to a manufacturer in Germany.

Key transactions and financial highlights

The transaction represents an enterprise value on a cash and debt free basis of 90 million Danish kroner. The acquisition will be structured as a 100% cash payment financed by an existing revolving credit facility.

The acquisition will be presented in the 2022 financial statements as a separate segment and integrated into the semi-detached segment in 2023 with adjusted comparable figures.

The plant’s expected turnover for 2022 is approximately 100 million Danish kroner with an EBITDA result at the expected break-even point. The pay level is expected to increase in 2023 due to production rationalization and increased utilization. The integration of the plant in the twinned segment from 2023 should not impact the overall margin level.

The impact on the financial outlook and 2022 objectives of the transaction

• The medium-term goal to sell 500 semi-detached homes per year by 2023-2025 will be updated to 750 homes per year around 2025
• The expected turnover of the plant in 2022 is 100 million Danish kroner with an expected result of profitability
• Special items should be in range DKK 2-5m

Leverage is expected to be around 2.25x post acquisition with a target below 2.0x by end of 2023 at the latest.

The transaction does not impact HusCompagniet’s capital allocation and dividend policy of returning excess cash to shareholders through dividends and share buybacks. HusCompagniet will aim for a payout rate of 50% of net income split between 25% in the form of dividends and approximately 25% in the form of share buybacks.

Due to the significant revenues in DKK, the acquisition does not require the approval of competition authorities.

The financial forecast for 2022 excluding transaction costs and associated costs is unchanged, but visibility has been further reduced due to the war in Ukraine. The geopolitical situation has not been so unstable in the past 50 years or more, and high cost inflation and struggling supply chains are affecting the market situation.

Advisors

watercraft serves as Financial advisors and Bech Bruun serves as Legal advisers.

For more information, please contact:

HusCompagniet

Mads Dehlsen WintherCFO

Cristina Rønde Hefting, IR & Press Manager +45 51 96 23 14

Information about HusCompagniet

HusCompagniet is one of the leading providers of single-family homes in Denmark. The company also builds semi-detached houses for private individuals and professional investors and has a presence in Sweden where it produces individual prefabricated timber frame houses through its VårgårdaHus brand.

The Group operates a lean and flexible delivery model with construction on site, primarily on customer-owned land. Construction is outsourced, allowing for a flexible cost base. In 2021, HusCompagniet achieved a turnover of approximately 4.3 billion Danish kroner.

HusCompagniet delivered 1,831 houses in 2021, including 1,441 single-family houses in Denmark, which corresponds to a market share of approximately 24% of the Danish market segment for new single-family houses. HusCompagniet has 16 offices with showrooms in Denmark and Sweden and more than 60 show homes and offers digital sales through the online platform “HusOnline”. HusCompagniet currently has more than 400 employees.

II

https://news.cision.com/huscompagniet-as/r/huscompagniet-acquires-prefab-factory-to-accelerate-production-in-the-growing-semi-individual-segment-,c3550782

https://mb.cision.com/Main/21145/3550782/1567435.pdf

(c) Decision 2022. All rights reserved., sources Press Releases – English