Good morning, ladies and gentlemen, and welcome to this briefing event for analysts, investors and media. My name is Elena Kukkonen, and I'm responsible of the Communications and Brand in Alma. This event is about Alma Media to acquire NetDx business from Ottawa, as we have announced earlier this morning. I will first hand over to Mr. Kai Telane, our CEO of Alma Media, and he will present the acquisition and the rationale behind it.
And then our CFO, Mr. Johan Nortinen, will continue with the financing the acquisition. And Mr. Thelen returns then to outline the presentation. After the presentation, we have time for questions and answers.
You're more than welcome to ask questions. We first take the questions from the conference call line and then from the online stream. I'd say that nice to have you here and nice to have you following our this fully online session today. So please, Mr. Keitelane, I hand it to you.
Thank you very much, Erina, and good morning for everybody on my behalf as well. We are really excited on this major step, major acquisition for strengthening our position in digital marketplaces in Finland. As Elena told you, I will first go through the main metrics of the target and, of course, the key rationale of this acquisition from Alma Media's point of view. And then after me, Johan Nordin, our CFO, will go through the financials, the financing of this acquisition. This is a major step for us to strengthen our position in Finnish marketplace is seen.
Early in the morning, we signed an agreement with Otava to acquire NetDx business. As you might have already read, the agreed enterprise value of the acquired business is €107,000,000 with the EBITDA multiple of 115,100,000 The target had revenue of €22,500,000 EBITDA of EUR 11,200,000.0 and operating profit of EUR 10,000,000. And as you can notice, this is a highly profitable Marketplaces business and fits perfectly to our portfolio. This acquisition follows Almedia's strategy to focus on digital media and services. That has been our strategy for fifteen years now, and we will continue with this major investment to fulfill the task.
This acquisition strengthens our position, especially in automotive and mobility services in Finland. Netics will be reported in our newly organized Alma Consumer segment, which is a combination of leading digital media, Ilpaleti and different kind of digital services in Finland. This AMA consumer forms an exceptional combination of services and content and data as a local partner in digital business and commerce. We assume the digitalization of mobility services and the automotive ecosystem is expected to accelerate further in coming years and the trading is expected to continue its rapid shift to digital marketplaces and platforms. After this acquisition, our revenue of marketplaces business in Finland will be approximately €46,000,000 Netics is the leading marketplace for automotive industry and motor vehicles in Finland.
It consists of leading marketplaces such as NetiAuto, NetiCone and NetiMoto. In addition to these, its brands are Kone Persi, which is a leading professional media for machine and transport business and then also the news service Amparit, which is an aggregator of different kind of news services. Nettix marketplaces reach an audience or visitors of 2,500,000 Finns every week. 39 employees will be moved to Alma Media. This is a network based business, which means that approximately 60 professionals work for the NetDx via other companies.
On the right side of this slide, you can see the share of the revenue of NetDx, 22,500,000.0 revenues, of which 81% comes from marketplaces like Nettie, Autoneticonia and Netimoto and 14% from professional media like Konepercent and then news services, 5% like Amperit. EBITDA was EUR 11,200,000.0. NetExt's recent development has been really favorable. Even last year, which was the crisis for COVID-nineteen, the revenues were growing nicely. The last five years, CAGAR has been around 7% and the EBITDA over 50% last three years.
The new consumer segment in which this NetTix will be reported is a strong local partner with a unique combination of digital content and commerce in Finland. There's a bunch of leading brands inside this segment. Like you can see from this slide, revenues more than EUR 90,000,000, operating profit EUR 25,000,000, last year figures and almost 80% digital of revenues. More than 300 employees, three thirty employees, a quite remarkable amount of the revenues of and the profitability of Alma Media as well. This segment, a combination of digital leading content and digital services and verticals, we can reach every Finnish household every week.
We have more than one million thousand five hundred registered users in Alma account and that this is growing nicely. And through these registered visitors and customers, we will get a load of data in order to improve the content and in order to segment this customer base better for our business to business customers use. After this acquisition, Alma will be a market leader as it has been in housing marketplaces, but also in market leader in motor vehicles motor vehicles marketplaces. Key rationale behind this acquisition are here. First of all, the Marketplaces business is growing all over the place, not only in Finland, but all over the Europe and globally.
This is a very logical step in our strategy, which has been transforming the business and leveraging the business from media to digital services. The target is leader in motor vehicle marketplace, as said before, and it brings us growth opportunities and opportunities to accelerate the sector's transformation, which is going on and even accelerating. Nettix business is a very well run business, as you can see from the profitability and the growth of the business. It's a network based business, highly scalable and very profitable. This new acquisition provides us new revenue opportunities in growing renting and leasing businesses, for example.
The new combination of our current businesses, leading content, digital content and leading verticals, unites outstanding capabilities of marketplaces, technology, expertise and media reach, which is a very valuable combination for our business customers in order to reach their goals. And last but not least, the data pool that we can get from this combination is extremely valuable and especially for the business to business customers and, of course, also for the product and service development. So these were the key rationales and the key metrics of the net debt to target. And now our CFO, Johan Nottine, will continue with the financing of this acquisition, and then we will finalize this presentation with the key elements of Alma's strategy. Juha?
You. Thank you, Kai, and good morning. I take some main points from this finance point of view concerning this acquisition. Like I mentioned, this acquisition was €170,000,000 from enterprise value. It will be paid in cash at the March and it's fully financed with the loan.
This will have a positive effect in earnings per share figure. If we include increasing interest costs and also increasing depreciations from purchase price allocations and also taking into account the synergies, the effect in earnings per share will be around €05 for the full year. Yes, depreciations will increase because of this purchase price allocations. We estimate it's around €3,000,000 This is preliminary estimate at the moment. Transaction costs will be around €1,500,000 €500,000 we have already booked as costs last year.
So this year will be €1,000,000 There will be synergies and we have been a little cautious with the sales synergies at the moment. There will be sales synergies as well between the marketplaces and between the media brands, but this €1,500,000 is mostly coming from cost synergies and they are primarily coming from the premises and also from the digital advertising, which is taking in ALMA from Ottawa Corporation and it's operated by the Ottawa Corporation at the moment. Also smaller parts come from ICT and finance functions. We have not changed our long term targets concerning this acquisition, but we have changed our guidance. And earlier, we have guided that our revenue and operating profit will be stable and even compared to the last year.
But because of this acquisition, our revenue and operating profit will increase compared to last year. Like I said earlier, we will finance this totally with a loan and we have agreed a new bridge facility of EUR $220,000,000 with Aupe Bank. And this new facility covers also the acquisition of minority stakes in Alma Media Partners. It will also cover our current revolving credit facility, which is amounted to €25,000,000 and this revolving credit facility we terminated this week. So this new facility will cover that also.
So that was briefly the finance point. And then if we look at how Alma Media Group looks like after this acquisition, You can see here that we will have these are pro form a figures to 2020, but we will have around €250,000,000 revenue. And this is pretty good balance between the big businesses. Like you can see the marketplace share is 41% and the media part is almost the same, 39%. Both are pretty much EUR100 million as a revenue point of view.
And then we have also services around EUR50 million. So this revenue split, which you can see here is our new revenue classification, which we present you in the first interim report this year. Our digital revenue share of digital revenue will be over 70% and the EBITDA ratio is close to 29%. So this looks new Almu Media after this acquisition.
Thank you, Johan. Quite a nice portfolio of highly profitable and nicely growing businesses. To finalize this presentation, before your questions, I just want to remind you the key elements of our strategy, which are, first of all, the transformation of the core business. So we will continue and even accelerate the digitalization of print media business. And in order to do this, we will intensify the group wise cooperation in order to support all the synergies that we can get from the machine.
The second part, of course, is to grow in digital, from media to digital services and marketplaces. And that's where our investments are going step by step. And as you can understand, this investment is, course, a major step into that direction. And the third one is, of course, to continue with the internationalization of the company, expand our business to new geographies, if only possible. At the moment, we are going in the Eastern Europe, Eastern Central Europe to the Bakken area.
And then, of course, we will leverage our business in our current geographical areas in the interesting value chains. So these three strategic points are very important for us. And as you can notice, this major acquisition falls nicely into this strategy. So this was a brief introduction to the latest and the last acquisition. And now we I think we have a lot of time for your questions, if you have any.
So don't hesitate to post your questions. Thank you very much.
Okay. Operator, we will be ready for questions.
Thank you. Our first question comes from the line of Sami Sarkamis from Nordea. Please go ahead.
Okay. Thank you. Congratulations on a sensible transaction. My first question would be that why now? I can say that this deal has been in the making for quite some time, But can you explain a bit that why you were able to come into an agreement at the moment and not earlier?
Well, thank you very much, Sami. Of course, these kind of deals takes time. So we have negotiated, of course. We have other targets on the table as well as we have always. So well, these will actualize and will be finalized as soon as they are ready, and now it's time.
And of course, we were able to do this acquisition only after having divested and finalized the regional media divestment to Sonoma, as you know. So our financial position was now ready for doing this acquisition.
Okay. And then my second question would be that can you confirm that you will not have to deal with competition authorities even though you will be consolidating the online classifieds market in Finland?
Yes. So we are targeting to close the deal by the March. And according to current Competition Act, having in mind the size of the revenues of or the combined revenues of Alma Media and NetDix, we don't have any reason to file this acquisition. So no, there's no question about this.
Okay. And then my final question would be on your M and A headroom following this acquisition. So how would you describe that? When could we expect next moves by Alma Media?
Well, okay. Now the financial position is more stretched than it has been recently. So of course, we need to digest this acquisition, and we can do this kind of bolt on acquisitions also in coming months and years, of course. But then on the other hand, I feel that financing acquisitions is not any problem for us. We can go to the stock market if needed.
The question is more about finding interesting investment targets than anything.
Okay. And are you currently seeing interesting targets beyond this deal?
Yeah. We are. Yeah. We have interesting targets all the time on the table.
Okay. Thank you very much. I don't have any further questions.
And the next question comes from the line of Pia Roskruis from Carnegie. Please go ahead. Hi. It's Pia Roskruis calling from Carnegie. With regards to increasing your exposure now to the Finnish market, I think, in conjunction with the q four results, you discussed your strategy and and your ambition to slightly lessen your dependence on the Finnish market.
I think the Netex deal makes a lot of sense, but but how do you look upon your dependency on the Finnish market now compared to your international operations?
Well, this isn't actually any kind of sign of change of the strategy. So we will continue our activities in order to internationalize the business and continue with internationalizing our portfolio. So in long term, we aim to go more international from this point. But of course, you have to have interesting targets. And as you have noticed, sometimes it takes time to reach the targets for us.
There's no change. Of course, this is a major investment. We get €22,500,000 more exposure on Finnish markets, but this is very, very interesting possibility for us and a very profitable and good acquisition for us. So there's no reason not to take part of this.
Yes. Okay. Thank you. Then looking at the Finnish market after you consolidate NetDx X to your business, do you still see room for substantial deals in the Finnish market?
No, it's difficult to say. At least we have possibilities. If we are thinking about the consumer businesses, there are a lot of room and this kind of bolt on acquisitions, of course, but it's too early to say is there a possibility to a major investment on consumer side. But then you have in mind that we have also the business to business side in talent, which we are or where we are increasing our investments in digital services as well. As you have noticed, by the end of the year, we have done different kind of deals.
So in broad sense, we will continue and have interesting possibilities to continue with the digital service acquisitions in Finland.
Okay. Thank you. Then if I may ask on the cost of debt, can you give some kind of guidance on the average interest rate on the increased debt?
We don't publish the interest rates directly, so I can't comment the agreement itself. But I think we have a strong balance sheet and have been and we have a quite good history from making a good operating profit and cash flow. So I think the price what we get from the bridge funding was pretty good from the market point of view, I would say. And it's good to notice that this is a short term financing and we will come back to this facility issue later this year because our aim is to finance this as a long term finance during the third quarter or fourth quarter in any case. So this is a short term finance facility.
Yes. I can continue saying that from my point of view, loans are reasonably priced, and we are really happy with the agreements that we have made with OPEB.
Okay, good. That's all. Thank you. We have another question from the line of Petr Kugla from SEB. Please go ahead.
Petr Kugla calling from SEB. I have one question. You now become a clear leader in especially the automotive vertical in Finland. Should we expect some kind of changes to your strategy in this market? And for example, will you continue to maintain altopali.com?
Or will you kind of merge that with NetviaAlpa? At the
moment, we don't have any plans to merge these brands. So we will continue with the current brands and continue in developing all those.
All right. And Alma Media Partners already has quite high EBIT margin, but net fixed is even higher at least in 2020. Do you have any kind of comments on what might explain the difference in profitability? Or should we basically assume an even margin for both of these two businesses going forward?
Well, it's a complicated question, of course. Netx is a combination of a diversified portfolio of very profitable businesses. But I think the main reason for high profitability is the market leading position of those brands. And then, of course, the highly scalable business that you have in that kind of verticals. We can say that if we take one of the biggest brands from our former media partners, we have a similar profitability profile for our brands or former brands as well.
But then as a combination of our media partners, they are this kind of new innovations and initiatives that are burdening the, of course, the profitability. So it's difficult to compare like that. But we expect the good profitability to continue, and we expect our ability to improve in order to leverage these kind of businesses of high profitability.
Understood. Okay, thanks.
Thanks.
And as there are no further audio questions, I'll hand it back to the speakers.
Thank you. There's two questions coming from the stream, the online questions. First, Nalle is asking, you show that Netix revenue compound annual growth rate historically has been around 7%, but it seems to have slowed down in 2018 and 2019. What is the mid term revenue growth potential of Nettix?
Well, that's a very good question. As a market leader, Nettix is, of course, dependent on the underlying market and the underlying development of the Finnish economy. And of course, as we have seen during the COVID-nineteen and last year, the sales of new cars were decreasing in Finland and that affected also to these marketplaces on that side. But on the other hand, the sales of used cars were increasing and improving, which were very important, of course, for Nettix and especially for the Nettix Auto to be able to mitigate the decrease of the new car sales in Finland. And that was the key for Nettix also to keep a good revenue level and increase the profitability level of the company.
So I think that in a normal market, so if the economy will normalize, we can expect the similar growth to happen as it has happened during last years.
Okay. Thank you. And then there is Petri Gustavsky from India is asking that, can you comment on NetExt annual investment requirements and if there is any need to increase investments in the coming years? Or can we assume the previous year's levels, EUR 300,000.0 to 500,000.0 to be a good benchmark going forward?
Well, it depends very much how we want to develop and renew the platforms in that sector. It's in our hands totally. But I would expect that we will increase a little bit the annual investments into those services in order to leverage the business in new areas and in order to combine those Nettix businesses properly to Alma Media current businesses and combine the data and so on. So I expect us to increase the annual CapEx level a little bit.
Thank you. And Thomas is asking that well done on this acquisition. You talk about future M and A. Is it going to be similar in nature, in example, focus on becoming market leader? Or are you will to buy small players in big markets?
So the main focus of our strategy has been to be the market leader even a niche market or in a small market. So we have noticed that being a market leader, you can easier become profitable than being number three or four in a small or bigger market. So the main target is to reach the market leading position. But then as we have done this kind of bolt on acquisitions, so we have gone in different kind of businesses by buying minorities in maybe in market leaders and in order to later get the position to be the market leader. So long story short, the main target is, of course, to become market leader or a strong second one for us.
You. Antti Gorhanen is asking guidance for synergies at €1,500,000 is a cautious target. How would a less cautious estimate look in the next two to three years when combining tech platforms and with staff cost synergies?
Yes, yes. But then on the other hand, if you compare synergies of €1,500,000 to the cost base of Nettix, which is around EUR 10,000,000. It's more than 10%, which is quite normal synergy level. But we don't want we won't usually or actually never overestimate the synergies when doing these kind of acquisitions. We want to be more on a cautious side than overestimate those, which is, I think, a good strategy.
But in long term, of course, we expect to have this kind of sales synergies with leveraging the businesses and with new services. But then you have to be honest with the cost synergies and the cost base where to drive these synergies, it's only €10,000,000 from Nettex side. And as we told, we are not aiming to close down any brand of these combinations. So we're going to continue with the current brands and continue investing in those brands. So that's one part of that question as well, an answer.
Thank you. Nale is asking that new online driven auto dealers are taking share such as Kamux in Finland. Is that a mid to long term threat to Nettix and its pricing power?
I don't think so because as we think and believe the whole industry is moving to digital transactions more or less. And more it goes to that direction, plays in our favor as well. So more we can do on digitalizing the whole industry, it is working in favor for us as well. So we don't think that digitalizing the transactions and the business of card industry is any kind of threat for us vice versa.
Thomas Lester, you talk about the data opportunity. Can you elaborate on how you would use data?
That's a very broad question, but a good one. Of course, as we have used the data until today, it is to improve the services, of course. The more you get the data from the visitors and their user habits, the better you can improve the services, like the content or the verticals. And we will continue with that. The more data you can get, the better services you can provide.
But then on the other hand, the data is very valuable for segmentation purposes and for marketing purposes for our business to business customers, which means that the better data you can get, the better segmentation you can get and the broader reach you can get, the better it works for our advertisers' purposes. Because we have the common client, our visitor is the same client as our car industry's client. So whether we can use data coming from the services, it works for business purposes as well.
Thank you. At this point, there is no more questions online.
Thank you very much. In that case, think, Juha, we will thank you very much for your attention and we are open for any kind of questions anytime. So we are available for your questions also in the future. Thank you very much.
Thank you.