Netcompany Group (NETC) M&A Announcement summary

Deal rationale and strategic fit

• The transaction aligns with the strategy to expand capabilities and enhance offerings in the financial services industry, targeting a market expected to exceed DKK 44 billion in 2025 and grow over 10% annually through 2028.

• Combines Netcompany's digital platforms with SDC's core banking solutions to create innovative, best-in-class banking services across Denmark, Scandinavia, and Europe.

• Leverages both companies' expertise to deliver improved, personalized, and digital banking experiences for customers and employees.

• Targets substantial value creation for shareholders and stakeholders by addressing high-spending, highly regulated FSI markets and modernizing legacy systems.

• Supports sustainable organic growth and positions the combined entity for future expansion in digital banking.

Financial terms and conditions

• Netcompany will acquire 100% of SDC for DKK 1 billion in cash, fully debt-financed within existing covenants and funded through existing credit facilities.

• The transaction will be executed via a newly formed subsidiary, Netcompany Banking Services, which will merge with SDC and become a fully owned subsidiary.

• The deal is expected to be EPS dilutive in 2025 due to integration costs, accretive from 2026, and double-digit percentage EPS accretive by 2028 compared to 2024.

• Share buyback programs are expected to resume after closing, with leverage projected at 1.5x by end of 2025.

Integration plans and timeline

• SDC will merge into a newly formed Netcompany subsidiary, fully embedding SDC's activities and creating a combined workforce exceeding 9,200 FTEs.

• Integration will focus on combining core banking systems with new digital, AI, and self-service modules, leveraging both companies' resources.

• The integration will allow modular and flexible offerings to banks, addressing both full-service and component needs.

• Closing is expected around mid-2025, subject to regulatory and customary conditions.

• Key financial and strategic updates are scheduled for August and October 2025, with a Capital Markets Day in Q4 2025.