Yesterday, INDUS announced the acquisition of QUICK Bauprodukte GmbH via one of its holding companies, BETOMAX. The target is active in in the fields of bridge and tunnel building as well as civil engineering. With 45 employees and € 8m sales in 2022, the company will become part of INDUS’ Infrastructure segment. The acquisition also supports INDUS’ 2023 strategy, i.e. focusing on its newly reclassified business segments of which Infrastructure (14 companies) is the top breadwinner in the portfolio (2021 EBIT margin: 12.8%).

About QUICK: The company was acquired at 6-7x EV/EBIT multiples, indicating a transaction price in the range of € 8-12m (eNuW € 10m), fully paid in cash. Known in the industry for on-time delivery of customized products (<7 days) and profound know-how, QUICK will strengthen INDUS’ portfolio with its technical know-how. Being the first company in the world to introduce asbestos-free reinforcement concrete, QUICK has more than 75 registered patents since inception. Being capex light and cash-flow positive, the acquisition of QUICK should bode well for the portfolio’s profitability going forward.

Synergies for BETOMAX: With similar sales strategies based on direct marketing and high level of specialization, QUICK and BETOMAX should benefit each other via an increased market access as well as cost synergies.

While QUICK marks the first acquisition this year, INDUS plans to acquire an additional 2-3 in 2023 alone. These new acquisitions should increase sales by some € 100m at 2x EV/Sales multiples, in our view. While the disposal of the two loss-making automotive companies – Selzer and Schäfer – should contribute a sales loss of € 50m in 2023e (eNUW), we expect an annualized inorganic sales growth of € 50m (2.6% yoy), not yet reflected in our estimates.

Overall, the Infrastructure segment looks set to be the main driving force for INDUS, going forward. For 2023e we expect sales to grow 3% at a stable EBIT margin of 13%, as most of the segment’s holdings were able to cope well with price inflation by passing on increased costs to their customers. Megatrends like increased mobility and urbanization, should allow for continuous dynamic top-line growth as well as margin expansion.

Reiterate HOLD, with an unchanged PT of € 24 based on FCFY 2023e.