Tieto acquires Norway-based Software Innovation to accelerate its role as the leading digitalization advisor in the Nordic countries
Tieto Corporation STOCK EXCHANGE RELEASE 25 June 2015 at 9.00 EET
Tieto has signed an agreement to acquire Software Innovation, a leading software company in the Enterprise Content Management (ECM) business in the Nordic countries. The acquisition will strengthen Tieto’s position as the preferred digitalization partner by increasing its capabilities in enterprise content management across the Nordic countries. The transaction supports the Group’s objectives of accelerating profitable growth as it strengthens Tieto’s presence in Norway and expands the company’s scalable software-driven business.
Software Innovation is a recognized market leader across the Nordic countries in enterprise content management in both the public and private sectors. The company has consistently gained market share and delivered solid profitability. Software Innovation has approximately 350 employees, and in 2014 the company’s net sales amounted to around NOK 364 million (EUR 41 million) and operating margin (EBIT) to 12.5%. Currently, around 75% of its sales come from Norway and the rest mainly from Sweden and Denmark. The public sector represents around 70% of sales, with the remainder accounted for by large and mid-size enterprises.
"The acquisition of Software Innovation is important to Tieto as this increases our ability to speed up our customers’ digitalization across Nordic countries and provides attractive growth opportunities. This strengthens our role, especially in the public sector, as the leading advisor in the cross section of business processes and new technologies. We warmly welcome our new colleagues from Software Innovation to Tieto in our common pursuit of accelerating Tieto’s wide-ranging renewal, innovation and growth," says Kimmo Alkio, President and CEO, Tieto.
"I am excited about the opportunity for us to combine Software Innovation’s and Tieto’s strengths in the Nordic information management market. Due to this acquisition we will be able to deliver leading-edge efficiency improvement through standardized content management solutions across all Nordic countries. Furthermore, this acquisition provides us with an immediate opportunity to expand in Norway also through our standard services, e.g. cloud services and application management,” says Håkan Dahlström, Executive Vice President, Public, Healthcare and Welfare, Tieto.
"I am convinced we will create added value for our joint customers and accelerate digitalization in a broader market. There will be good opportunities for our existing and new customers to utilize Tieto’s global delivery and the full scale of competencies in the Nordic countries. I believe that our employees and customers have much to look forward to as Software Innovation becomes part of a larger company,” says Torstein Harildstad, CEO of Software Innovation. Mr Harildstad will continue to be responsible for the Software Innovation business at Tieto.
As a result of the acquisition, Tieto’s market share in the Nordic enterprise content management business, worth about EUR 350 million, will increase from its current level of around 7% to some 20%. In addition, Tieto sees attractive opportunities to provide Tieto’s broad set of services covering outsourcing, consulting and system integration, as well as other Tieto software products. The acquisition is subject to approval by the Norwegian competition authority and the closing of the agreement is anticipated to take place during autumn.
Based on the acquisition price of NOK 610 million, Enterprise Value (EV) of Software Innovation is estimated to amount to NOK 623 million. The acquisition price will be paid in cash in connection with the closing. The transaction is estimated to be value accretive to Tieto.
Additional information related to the acquisition is available at www.tieto.com/investors/ir-news
For further information, please contact:
Kimmo Alkio, President and CEO, tel. +358 2072 010
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
Kia Haring, Head of Global Communications, tel. +358 40 765 3700, kia.haring(at)tieto.com
Torstein Harildstad, CEO, Software Innovation, tel: +47 90826019
Danske Bank has acted as Tieto’s financial advisor for the transaction.
Tieto is the largest IT services company in the Nordics providing full lifecycle IT services. We also provide global product development services for companies in the communications and embedded technologies arena. Through industry insight, technology vision, and innovative thinking, Tieto proactively strives to inspire and engage our customers in finding new ways of accelerating their business.
Building on a strong Nordic heritage, Tieto combines global capabilities with local presence. Headquartered in Helsinki, Finland, Tieto has over 13 000 experts in more than 20 countries. Turnover is approximately EUR 1.5 billion. Tieto’s shares are listed on NASDAQ in Helsinki and Stockholm. www.tieto.com
Software Innovation helps organizations manage, share and use information as their most valuable resource. We have 30 years of expertise and experience in developing modern, user-friendly IT solutions that improve and streamline records management, case management and technical document control. Software Innovation is recognized as a leading international actor by companies like Gartner and Microsoft, and our solutions are used by over 700 organizations and 200 000 users. Software Innovation has 350 employees with offices in Copenhagen, Stockholm and Bangalore, and is headquartered in Oslo.