Relais' subsidiary Raskone acquires two heavy commercial vehicle workshops from Wetteri

Translation: Original published in Finnish on 07/08/2025 at 08:15 am EEST

Yesterday, Relais and Wetteri announced an agreement under which Relais' subsidiary Raskone acquires Wetteri's heavy equipment maintenance and spare parts business in Kajaani and Joensuu. We consider the acquisition of highly profitable workshops favorable for Relais' shareholder value creation, provided profitability can be maintained at its high level. For Wetteri, the deal clearly improves its tight balance sheet position and provides flexibility for implementing the updated strategy. At the same time, however, the divestment weakens the company's profitability and further raises the bar for a turnaround in profitability. The transaction is subject to FCCA's approval, but we consider its completion likely.

Raskone acquires Wetteteri's heavy commercial vehicle workshops in Kajaani and Joensuu

The workshops provide authorized repair and maintenance services for, e.g., Scania, Mercedes-Benz and MAN. The transaction price is 13.8 MEUR, which is paid in cash. According to Wetteri's release, the acquisition target's EBITDA for 2024 was 2.3 MEUR, so the valuation multiple of the deal is approximately 6x EV/EBITDA. The divested business had revenue of 10.3 MEUR in 2024. Although the revenue of the transaction only corresponds to about 2-3% of both companies' 2026 revenue forecasts, the impact of the transaction is more significant at the EBITDA level. The target’s EBITDA (2.3 MEUR) corresponds to approximately 10% of Wetteri's and 4% of Relais' 2026 EBITDA forecasts. We compare the target’s EBITDA to our 2026 forecasts, which fully consider the significant recent M&A transactions of both companies. The transaction is expected to be completed during Q3/25. 

Profitable workshops strengthen Raskone’s market position 

The acquired businesses are very profitable compared to the Relais Group (2024 EBITDA-% 22% vs. Relais 16%); consequently, we consider it unlikely that the workshops could strengthen their profitability as part of Raskone. If the businesses can maintain their high profitability, we consider a 6x EV/EBITDA multiple a favorable acquisition price for Relais' shareholder value creation. Assuming the earnings level is sustainable, the purchase price translates into a return on invested capital of over 15% after taxes, which clearly exceeds our required return for Relais (WACC 8.1%). The sustainability of the earnings level is supported by the strengthening regional market position in Kajaani and Joensuu following the transaction, as the chain already has brand-independent workshops in these locations. From Relais Group's perspective, the transaction was a step towards the target of 50 MEUR pro forma EBITA by the end of 2025. 

We will add the transaction to our forecasts if the FCCA approves the transaction. In this case, our EBITDA forecast for next year faces an upward pressure of approximately 4%, and net debt will increase by 10 MEUR in line with the purchase price. Relais previously announced, in connection with the Team Verksted Holding AS acquisition that it is planning to strengthen its balance sheet with equity, which would allow it to continue its acquisition-driven growth in the short term.

Wetteri's balance sheet position improves clearly with the transaction

For Wetteri, the deal offers much-needed flexibility to its tight balance sheet position. With the purchase price of 13.8 MEUR, the company can pay off its bank loan of some 7 MEUR if it wishes, and the equity ratio will improve significantly. We believe Wetteri will record a clear capital gain from the deal in Q3. 

We also consider the transaction justified strategically, as it provides flexibility for implementing the updated strategy. On the flip side, the transaction has a clear negative impact on the company's current EBITDA, and this further raises the bar for the profitability turnaround. We therefore consider it likely that the updated strategy (which we believe will be published in August) will, at least initially, focus more on profitability.