ComCenter is a local player in communication solutions focused on the SME segment, with revenues of SEK54m and EBIT of SEK7.2m (implying an EBIT margin of 13.3%) for the fiscal year 2021/2022. Since its establishment in 1999, ComCenter has evolved into one of Infracom’s most significant partners, providing services mainly within telephony and internet access with associated hardware and infrastructure. The company will be consolidated as of 8 January 2024, and we find the EV/EBITDA (exclusive earn-outs) of 6.1x based on fiscal year 2021/2022 to be fair and in line with the prices Infracom has paid historically.

In our view, ComCenter will fit well into the group due to several aspects. For example, Infracom will further expand its geographical presence thanks to the acquisition, while we believe the strong partner relationships and their knowledge of each other will lead to rapid integration and realisation of synergies. While Infracom sees a clear potential for sales synergies through cross-selling its other services to ComCenter’s customer base, we find it worth mentioning that cSEK11m of sales will be eliminated in the consolidated income statement, as this relates to purchases from Infracom.

We raise our 2024e sales forecast by 3% while increasing the EBIT forecast by 4% for the same year on account of the acquisition. However, despite the estimate changes, our DCF model keeps the fair value range intact with a Base Case of SEK40 and Bear and Bull Cases of SEK25 and SEK52, respectively.