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S&T buys Iskratel Group for 5G, IoT skills

S&T AG is buying Iskratel Group, an integrator in telecommunications, transport, public safety and energy industries in Central and Eastern Europe

Both companies recognize synergies for their future development and success, especially in IOT software and 5G applications, which complement and strengthen the S&T product range. The acquired 5G know-how and the solutions based on it can be combined with established S&T products in the smart industry sector, such as SusieTec.

S&T employs some 4,900 people and operates in 32 countries around the world. Hannes Niederhauser, CEO S&T AG: “We have been following 5G developments for a long time, have identified applications ready for this technology, and expect to gain an advantage by strengthening our 5G product portfolio. Due to our synergies we will be able to increase Iskratel’s results to over 10% of EBITDA within the next two years. With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains.”

Formed in 2019, with 900 employees, the Iskratel Group generated sales of €115m with positive profitability, so the fixed purchase price of €37.5m corresponds to a revenue multiple of around 0.35. Variable other payments are dependent on future profit developments. The transaction is scheduled to close in autumn 2020, once all the official approvals have been obtained.

The roll-out of 5G equipment on high-speed trains will be advanced while strengthening the transport business, it says. This is an area where the S&T Group has already implemented joint projects with Iskratel in Slovenia. Further synergies will open up in areas such as sourcing, manufacturing and sales, with S&T providing the business with access to the Western European market. In return, S&T can draw on Iskratel’s employees and long-term reputation in the Adriatic region and Eastern Europe.

Željko Puljić, CEO Iskratel: “The Iskratel Group has made a very clear and ambitious strategic plan which will be much more efficiently realized through numerous synergies within S&T AG. Faster portfolio development and market penetration, especially in areas of IIOT and 5G solutions, safe and smart communities, virtualization of access and core communication networks will be enabled through a stronger combined innovation and know-how, sourcing and sales network. We are also increasing human capital, which we continue to recognize as a crucial element in further success.”