BREAKING NEWS 13.09.2024

In the press release of September 10th, 2024, Reway Group SpA – a leading Italian company in the restoration of road, highway, and railway infrastructure– has signed an agreement for the acquisition of 60.0% of Vega Engineering Srl, a multidisciplinary engineering company active in the design of road and railway infrastructure, civil and industrial works, as well as providing project management and support services to the Sole Project Manager (Responsabile Unico del Procedimento – R.U.P.), a figure tasked with coordinating and managing all phases of a public project.  Founded in 2011 and headquartered in Lucca, Vega Engineering has collaborated with important entities such as highway concessionaires, major railway operators, engineering firms, port authorities, and numerous other construction and management companies. Vega Engineering’s team consists of 25 resources, including employees and collaborators, and is made up of highly qualified technicians specialized in different but complementary sectors such as road design, railway design, seismic design, hydraulic engineering, metal structure design, and the technical-economic management of projects. As of December 31st, 2023, the target company reported revenues of €2.70 million, EBITDA of €1.30 million (EBITDA margin of approximately 48.0%), and a NFP of €1.00 million (cash positive).  Vega Engineering has aready been working with Reway Group companies, primarily providing consulting services for the preparation of technical documentation supporting bid submissions. More recently, Vega Engineering has also been assigned design projects. The Investment Agreement between Reway Group and the shareholders of Vega Engineering commits Reway Group to acquiring 100.0% of the target company in two distinct phases: The first phase concerns the acquisition of 60.0% of Vega Engineering’s share capital by November 30th, 2024, for a total consideration of €3.60 million. This acquisition will be carried out half through the use of €1.80 million of own resources (without resorting to bank financing) and, for the remaining part, through a reserved capital increase for the sellers, which will be approved for an amount of €1.80 million. The Reway Group assembly will approve the capital increase by the deadline of November 30th, 2024, excluding pre-emptive rights; The second phase involves the acquisition of the remaining 40.0% of Vega Engineering’s share capital through the exercise of a put & call option. This transaction will take place starting from the approval of the 2026 financial statements of the target company and must be completed by September 30th, 2027. The consideration will be calculated based on the average EBITDA of the 2024, 2025, and 2026 financial years of the target company.  This transaction aligns positively with Reway Group’s strategic development plan, expanding the Group’s range of services into the design of infrastructure projects. Furthermore, the acquisition will enhance project execution efficiency, boosting the Group’s ability to initiate and manage some of the contracts in its backlog which, as of September 6th, 2024, amounted to approximately €955.00 million. In light of the press release, while awaiting a meeting with management and reviewing the half-year results, we confirm our estimates: target price €8.30, rating BUY, and risk Medium.

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