This is Erik Stenfors speaking. Thank you all for joining this presentation of the acquisition we announced this morning. We are quite eager to tell you more, so I think we turn directly to page number three. We have prepared a presentation in seven slides. I will first repeat the strategy for this year to put this deal in perspective. It's the Roadmap 2021. We will go through the new company, SLP, and next I hand over to Lars Åkerblom, our CFO, to go through this transaction and the financial impact. We end the presentation with some conclusions, and then we move on to the Q&A session. If you please turn to page four. As we stated in our full-year report last month, 2020 was a quite tough year for some of our customers with lowered sales.
The good news is that we expect the volumes to come back later this year. They are solid companies. 2020 was also an interesting year because it also gave a full-scale test of our operation, where our larger cluster turned out really well. We got some recognitions and awards because we were able to maintain high quality and good delivery accuracy during really changing volumes. Our main cluster in Sweden, which accounts for 1/3 of our revenue, they had a quite dramatic drop of 12% in sales, but still we could post an operating margin well above 9%, which is outstanding. We also saw that we had actually all-time high in our cash flow last year, over SEK 180 million. In addition to this pandemic brought out in the open how fragile the global supply chains are.
This was actually fueling a trend we've seen a few years where the globalization is turning back to regionalization of manufacturing. If we turn to page five. In the light of this, the way forward is quite clear. We will further strengthen our clusters. It's both then to be able to cope with the changing volumes in all clusters, especially when the volumes comes back and sales is increasing, but also to accelerate the margin to bring up the good cluster margin to a group level. We're doing this in two ways. We are investing in Estonia. We announced just before New Year's Eve that we will build a new production plant, 12,000 sq m.
It will be ready in one year from now, and I really hope that the pandemic will be over, and we will have a chance to meet in person and not only through this distance communication. Another way we strengthen our clusters is through acquisitions. Now, there are a lot of companies up for sale, and we are quite careful when we look at these different single technology contract manufacturers. They have to add customer value, and they also have to fulfill our acquisition parameters. That moves us to page number six, please. We have here a perfect fit. This is the company SLP, Suomen Levyprofiili. It's located in Eastern Finland, in North Karelia. It's actually a mirror of Sweden. We have our operation in Western Sweden, close to the Norwegian border, and here we are in Eastern Finland, close to the Russian border.
We do like to stay out of the big cities because, of course, cost structures, the premises have a better price outside the big cities, but also people tend to be more loyal when you move out from the big cities. This is a manufacturer of sheet metal mechanics, and they are specialists in tanks, covers, and hoods. Now, if you do tanks, you have to be really skilled in welding because you cannot have any leakage. When you do hoods and covers, you have to have first-class painting. Now, this is actually then a competence which is not just added to Finland, but also to the whole HANZA group, so we have customer value right there. They are running this in a 7,000 sq m, really nice, well-organized production plant built in 2014. Already tailor-made then for lean production flow.
The owner of this building is the Joensuu Municipality, we have a lease contract. The customers, they come from forestry, which is an interesting sector for us. We like to increase that. They come from mining. We already have a good customer base. By this, we can then increase our complete offer. They also have the machinery customers. The Managing Director is Aku Lampola on the picture to the right. Actually, we've been following this company for a couple of years, what is really important is that they have the same culture as we have. We do believe in a careful HR due diligence. It's really good that we're sharing the same core values. Why? We have decentralized organization, it's really important that different factories are responding to the same values. Then we turn to page seven.
This is then the upgraded cluster in Finland. We have the operation in Iisalmi, where we are experts in machining. We have the unit in Heinävesi, a large one, 11,000 sq m, where we have different technologies. It's a multipurpose unit and also good for logistics. Then we have Joensuu. As you can see on the map, it's quite close. It's only 80 km between Heinävesi and Joensuu. This means that we can bring out our checklist and tick all boxes when it comes to these acquisitions parameters. Geography, technology, customer base, culture, and also finances. To show that, I will now leave over to Lars Åkerblom , and we move to page eight, please.
Thank you, Erik. Can you confirm that the people can hear me?
We hear you.
Yeah, very good. We did this acquisition today, and the valuation or the price of the 100% share of SLP is approximately SEK 33 million. On top of that, we also took over a shareholder loan of approximately SEK 15 million. The sales of the company is approximately SEK 150 million with an EBITDA of SEK 14 million. There is a loan in the company of approximately SEK 22 million, and there's also this shareholder loan that we acquired. If we take the share, what we are paying for the company and divide it for the shares and includes the shareholder loan, that gives an EBITDA multiple of 3.4 and enterprise value in relation with EBITDA of approximately 5. The purchase price is paid with both cash today and also that we paid in cash flow for the loan.
There's a smaller part in additional purchase price. We also paid with 1.8 million shares in HANZA. These shares are within the lock-up agreement, so they cannot be transferred or sold until one year from now in April 2022. This issue leads to approximately 5.5% dilution, and by that time, that will have 32.8 million shares going forward. We move to page nine. We are from now including SLP in the financials of HANZA, so by the end of March, we'll have the balance sheet and a smaller part of the other P&L in quarter one results and financials. The operational debt, as I said previously, is approximately SEK 22 million, and the turnover is SEK 150 million, with a quite solid and good profit of EBITDA margin of 9.3%.
We have estimated the integration cost to be SEK 6 million, and main part of that will be taking in quarter one. Due to these integration costs and then transaction costs, we say that the total contribution to the HANZA P&L, the earnings will be quite small in 2021. That is, of course, that we are making money in the SLP, but we have this one-time cost. In total, it gives a smaller contribution to the earnings. When these are taken, the one-time cost, we of course see that this will contribute to the earnings per share and the profitability in the HANZA Group. Then I leave over to Erik to summarize the acquisition.
Thank you, Lars. We turn to page some conclusions. The year 2020 brought a full-scale stress test to HANZA. We saw how well the larger clusters responded to this, we had a good proof of concept. We also saw that we came out of this year with a good financial position. We also see this global trend. It's strengthened the trend towards regional manufacturing, which is actually the core of our business concept. Based on this, it's quite easy to set the Roadmap for this year to further strengthen clusters. It means that this acquisition of SLP is not just an acquisition, it's actually an important delivery on our strategy. Therefore we can, this very good and sunny Friday, welcome 100 more competent and experienced people to the HANZA group. By that, we leave over to the Q&A session.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Fredrik Nilsson from Redeye. Please go ahead.
Hello, Fredrik Nilsson from Redeye here. Following this acquisition, how strong will the Finnish cluster be? Will it be on par with the Swedish one, or do you need additional acquisitions in Finland to achieve that?
It will not have the same size as Sweden, but it will be operational really well. I think we told in the year-end report that we spent a lot of energy to fine-tune the organization last year. We do have strength in the organization prior to this acquisition in Finland. We believe that there could be more acquisitions, of course, because we think this is the important one to then really strengthen Finland and make the future great.
Okay. In terms of margins, the Finnish cluster should have a long-term potential in line with the Swedish cluster, if I understand you correctly?
Lars, would you comment on this?
Yes, I can comment. We have said several times that within the other markets, we have different levels of profitability in the different sites and in the different clusters. The overall goal is, of course, that every cluster should have and meet the financial target, the financial goals we have within HANZA. By this acquisition, the goal is when we have taken this one-time cost, it's of course that we should meet and be able to have the cluster of Finland to align with the financial goals that we have within HANZA. If that is within six months or a year or one and a half year, that we will not be able to tell right now. Of course, we see cluster Finland must and shall be on the right level from a percentage-wise in earnings.
Okay. One question regarding the impact from COVID-19 on SLP. Considering the industry exposure, it seems reasonable to assume that there may have been a negative impact. Can you elaborate a bit on that?
There has been an impact, yes, of course. The sales we are talking about now is of course lower than it was pre-pandemic.
Okay.
We expect also some volumes back to this company. Actually, part of Finland was quite hurt by the COVID-19. They had a bit better or stronger lockdown than Sweden. We expect also volumes to come back a bit to this company.
Okay. That's interesting. That's all from me. Thanks.
The next question comes from the line of Johan Högberg from Aktiespararna. Please go ahead.
Hello, Johan Högberg at Aktiespararna here. What kind of synergies can we expect from this acquisition?
Erik here. From the sales part, of course, if you are a single technology manufacturer as SLP, now you can go to your customer and say that now even better. Previously, we were just offering one technology in one factory. Now they're offering all technologies, and they're also part of a global footprint. Of course, in our experience, customers response really good to that. Secondly, we see also when it comes to sales, a backsourcing trend. We see customers coming back, been in Asia, come back to Finland. I think that this setup will help us to be a place where this moving manufacturing can land. Cost side, of course, Lars can comment on this. We work with shared service centers and other ways of collecting costs.
Yes, I can comment also. Of course, what we can utilize, and we've been historically quite good in managing working capital. Without giving any promises, we will of course work with the working capital and try to release some cash flow from the balance sheet. As I said, we can integrate and utilize the resources in admin and financial employees et cetera in a better way when we have the cluster in Finland.
Okay. One final question. Year-end, you had about SEK 121 million in cash. Why did you choose to partly finance with new shares?
I think if you look at the acquisition price, we paid SEK 33 million for the shares, and they make an EBITDA of SEK 14 million. Part of making such a deal is, of course, that the sellers also believe very much in HANZA and the HANZA development and the plans we have together. I think that's a way to make a good deal for both parties.
Okay. Thank you.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. We have one more question from the line of Erik Cassel from ABG. Please go ahead. Erik, if your line is on mute, can you please unmute yourself?
Hello? Can you hear me?
We can hear you now.
Hello.
Yes.
Okay, perfect. Hi, good morning, and congratulations on the solid acquisition. With IFRS 16 and the kind of leasing you mentioned for the facility, I find it somewhat hard to truly interpret the EBITDA margin. Is it possible to give some clarity on the EBIT level as well?
You are totally correct. SLP is reporting according to Finnish GAAP, and we need to adjust it to IFRS. If you compare in Finnish GAAP the difference between the EBITDA and the EBIT, it is a minor difference. The EBIT level is, I would say, 2%-3% lower than the EBITDA margin.
Okay, perfect. Do they own their own machinery, or is that leased as well in some way?
Sorry, I didn't hear you.
Are the machinery leased within the facility, or do they own that?
The main part of the machinery is owned. There are some smaller leasing agreements for machinery as well.
Okay, perfect. I guess there aren't much investment needs. We won't see above normal CapEx to invest in this facility then?
That's a future question. We will continue to invest like we invest in every site and in every cluster, depending on how the sales grows and the customer base.
Okay, there's no urgent investment needs in this facility, I suppose?
No. I can comment this, Erik. There is no urgent need. As I think it was earlier in the presentation, we have already invested about SEK 10 million in Estonia, Finland with new machinery.
Yes.
Again, with good sales, more investments can come.
Yes, of course. How long do you think it would take before you reach a level of integration and full synergies between the businesses here in Finland?
Within this year.
Okay, perfect. On the, I think you mentioned cash, additional purchase price, could you provide any clarity on the sort of earn-out structure and the terms for performance, if there are any?
Lars, can we share something about that?
No. I think we can comment in the way that it will not affect our work with being able to consolidate the Finnish cluster and integrate SLP into the HANZA way of working.
Okay. Thank you very much, guys. That's all from me.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Then we just thank you for dialing in. It's a really good day for us in HANZA, and good to show solid delivery on our strategy. We hope to be able to bring out more news later on, and then we can speak again. Thank you so much.
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