Translation: Original published in Finnish on 03/16/2026 at 09:15 am EET

We discontinue our coverage of Tecnotree as the company has terminated its research service agreement. Due to the termination of coverage, we no longer issue a recommendation (was Hold) or target price (was EUR 5.70) for the share. A public cash offer for Tecnotree was made at the end of January, and the offer period is currently underway.

Tecnotree's past few years have been eventful

We started covering Tecnotree in March 2021. Tecnotree was then in a strong earnings growth phase after difficult years, and the company managed to exit the debt restructuring program supported by the capitalization brought by the share issue. Despite the strong performance, Tecnotree was unable to convert its earnings into cash flow, which was reflected in an increase in receivables on the balance sheet, and the company had to seek additional financing in 2023 through convertible bonds. Extensive capitalized product development investments and exchange rates also hurt cash flow, and overall, the cumulative free cash flow in the 2020s has been weak relative to the earnings level. With cash flow challenges and an expanding balance sheet, we have seen a clear risk in the quality of items recorded on the company's balance sheet.

From 2024, the cash flow gradually improved, and in 2025, the company already generated a clearly positive cash flow (free cash flow 4.6 MEUR). For 2026, the company guided for a slightly improving free cash flow exceeding 5 MEUR, which still indicates rather weak cash conversion.

In addition to challenges related to cash flow repatriation, the company has struggled in recent years with several ambiguities related to governance and investor communications, which have affected investor confidence and increased the company's equity risk premium in the stock market. 

The purchasing consortium wants to continue the growth strategy as a private entity

The latest turn in Tecnotree's investment case was when a consortium formed by the company's CEO, Padma Ravichander, its largest owner, Fitzroy Investments, and Africa-focused private equity firm Helios Investment Partners made a Board-recommended cash tender offer for Tecnotree's shares (EUR 5.70 per share), convertible bonds, warrants, and options. According to the consortium, taking the company private would, among other things, remove the reporting and cost burdens associated with being listed. We believe the consortium also sees operating as a private company as freer than a listed company, both in terms of investor communications and, e.g., implementing more aggressive growth investments.

In addition to Ravichander and Fitzroy, Luminos Sun Holding Limited has also committed to accepting the offer, and together these commitments represent approximately 46.7%, including all outstanding convertible notes. Kyösti Kakkonen, who was initially reluctant to accept the offer, has already publicly commented that he supports the offer. Among the larger minority owners, at least Jorma Nieminen (8.3% holding at the end of February) seems to be unenthusiastic about the offer. Nieminen and his companies have also increased their holding in Tecnotree even after the offer, which may indicate challenges for the consortium to acquire 90% of the shares.

Coverage of the share ends

Our research coverage of Tecnotree has been based on an equity research service agreement between Inderes and Tecnotree. Unfortunately, we will no longer provide research coverage to our investor community and owners of Tecnotree as the company has terminated the agreement. The company's development can be monitored on the company's  investor pages. All of our previously published research on Tecnotree continues to be available in our service.