Translation: Original published in Finnish on 10/2/2025 at 7:55 am EEST.

Digital Workforce announced yesterday that it had, as expected, completed the acquisition of e18 Consulting Ltd. The company had already announced the transaction in connection with its Q2 results, and we had consolidated it into Digital Workforce starting in Q4. In our view, the acquisition clearly expands Digital Workforce’s international growth opportunities and market potential.

Significant partner acquisition from the UK

The transaction constitutes a complementary and strategic acquisition that fortifies profitable international growth in the healthcare sector. In 2024, e18 Consulting Ltd generated 4.9 MEUR in revenue, 0.65 MEUR in EBITDA, and 0.65 MEUR in EBIT. This means profitability is 13% of revenue, which is clearly higher than Digital Workforce's profitability. We had already included the transaction in our estimates starting from Q4. The transaction increased Digital Workforce's annual revenue by just under 20% and next year's EBITDA by just over 20%. In our view, the transaction has good potential for revenue synergies and for broader utilization of Digital Workforce's capacity. At the same time, the company makes a significant step towards its financial targets for 2025-2026, which include a revenue target of 50 MEUR in 2026, of which 40 MEUR is organic revenue.

e18's customers include dozens of NHS organizations across several integrated care systems (ICS) areas, ranging from acute care trusts to community and mental health service providers and primary care networks. The NHS (National Health Service) is the UK's national and taxpayer-funded healthcare system. It consists of over 200 NHS Trusts, which are organizations providing healthcare services.

The enterprise value (EV) of the acquisition is 5.8 MEUR. The earn-out is tied to the development of e18's EBITDA and can be a maximum of 7.3 MEUR, depending on the EBITDA levels of the next two financial years, and it is paid annually after each financial year. In our view, the deal structure is good, as it is more heavily weighted towards earn-out than usual and tied to performance. Digital Workforce's recurring revenue-focused business model also strengthens customer retention and reduces the risk of customer churn once the earn-outs have been paid. In addition, the fact that the companies already know each other reduces integration risk and improves synergy potential. Both the purchase price and the additional purchase price are settled at 20% in shares through a directed share issue to the seller and 80% as cash consideration. Digital Workforce's Board of Directors has now also resolved on a directed share issue to Louise Wall, the seller. In the issue, a total of 342,477 new shares were subscribed with the total subscription price of 1.15 MEUR (3.36 euros per share). The subscription price is based on the volume-weighted average price of Digital Workforce’s share during the period from June 19, 2025, to July 17, 2025.

It is somewhat challenging to comment on the deal's valuation in more detail at this stage, as we do not know the specific EBITDA-level criteria for the earn-out payment. Overall, considering the preliminary purchase price valuation (EV/EBITDA 9x) and good customer retention, the purchase price is neutral/low in our view.

We believe the acquisition will clearly expand Digital Workforce’s international growth opportunities and market potential. According to the company's comments, the acquisition positions the company as a leading player in the automation of social and healthcare pathways in the United Kingdom and enhances cross-selling and upselling opportunities in all current target markets.