HomeMaid: The valuation remains polished

The acquisition of Rimab Facility Service (“Rimab”), announced a couple of weeks ago, aligns well with HomeMaid’s strategy to strengthen its presence in the B2B segment and unlock potential synergies. That said, we are somewhat surprised that HomeMaid went for such a large acquisition (+100 MSEK in revenue). However, the acquisition price seems fair, considering Rimab remains in a turnaround phase with a lower share of recurring revenue and weaker margins compared to HomeMaid. These factors introduce small operational risks to what otherwise is a very stable, higher-margin business. However, if HomeMaid succeeds in unlocking the expected revenue synergies and improves Rimab’s profitability, there is clear potential for value creation, given the acquisition multiple. Even so, at the current valuation, we see the risk/reward profile as insufficient. We increase the target price to SEK 35 (was SEK 29) following the acquisition and reiterate our Reduce recommendation.

Adding scale and depth within the B2B segment

Following the acquisition, HomeMaid’s B2B segment expands by over 60%, though B2C remains the largest share of revenue (2025e pro forma: ~60%). Key synergies are expected to stem from cross-selling through leveraging overlapping geographic footprints, as well as operational know-how. Rimab stands to benefit from HomeMaid’s strong focus on margin optimization and larger resources, while HomeMaid can gain from Rimab’s expertise with tenders. While tenders provide access to larger contracts and higher volumes per customer, they also bring risks of revenue volatility and margin compression, particularly in the highly competitive public sector. Rimab’s revenue exposure to public contracts appears rather balanced but still represents a large portion of its topline, which presents negotiations risks. Moreover, Rimab’s smaller customer base increases revenue concentration risks compared to HomeMaid’s existing B2B segment, which relies on smaller contracts to a greater extent. On a positive note, a large share of Rimab’s customers have been with the company for a long time, suggesting a high level of satisfaction with its services.

Incorporating the Rimab acquisition into our estimates

The total consideration includes a fixed upfront payment of 15 MSEK and a variable earn-out linked to Rimab’s 2025 performance, resulting in an implied purchase price of 5x EBIT. While this multiple is low both in absolute terms and relative to HomeMaid’s LTM adjusted EV/EBITA of 16x, it is broadly in line with historical acquisitions (~3-5x EV/EBIT). However, prior acquisitions have typically featured stronger margins, whereas Rimab remains in a turnaround phase with lower underlying profitability due to its exposure to the public sector. Although cost-cutting and margin-enhancing initiatives have started to show positive effects, the outlook remains harder to gauge given Rimab’s volatile recent performance. We therefore view the acquisition price as fair, neither a bargain or expensive. Meanwhile, the Swedish home cleaning market (RUT) showed signs of stabilization in June after a strong spring. Market growth reached 11% y/y in Q2 (Q1’25: 10%), but the broader economic recovery remains slow, limiting momentum in the B2C segment. Against this backdrop, we maintain our pre-acquisition estimates for HomeMaid intact. However, incorporating Rimab into our forecasts lifts our 2025e revenue and EBITA by 9% and 4%, respectively, and our 2026e revenue and EBITA by 18% and 9%.

Valuation remains stretched, even after estimate changes

Since our Initiation of Coverage report (5/23/2025), the share price has increased by ~11%. Based on updated 2025–2026e forecasts, HomeMaid trades at forward 25-26e adjusted EV/EBITA and P/E multiples of 14-12x and 18-16x, respectively. These remain above our acceptable valuation ranges (EV/EBITA: 9-12x; P/E: 11-14x). While expected earnings growth partially offsets anticipated multiple compression, the expected return relies largely on a ~4% dividend yield, which we consider insufficient. We therefore await a more attractive entry point at this time.