Kreate acquires SRV’s Infra business

Translation: Original published in Finnish on 10/28/2025 at 8:12 am EET.

Kreate announced yesterday that it is acquiring all shares in SRV's subsidiary SRV Infra Oy. The enterprise value of the transaction is approximately 30 MEUR, and it will be carried out in cash. SRV Infra’s revenue in 2024 was 52.2 MEUR, and its EBIT was 2.6 MEUR. This acquisition will expand Kreate's offering in Finland into an entirely new business area, underground rock construction. The purchase price aligns with the company's own valuation, and we consider it neutral given the acquired company's high profitability and positive earnings trend. The transaction will require us to revise our estimates, which we will update in the coming days.

Expands and strengthens the offering

The acquisition aligns with Kreate's strategy, which centers on specialized expertise in demanding infrastructure construction. With the acquisition, Kreate expands its offering in Finland into an entirely new business area for the company, underground rock construction. According to the company, this business area has a strong future outlook, supported by security and security of supply considerations related to the geopolitical situation, among other factors. In addition, the acquisition strengthens Kreate's existing foundation and special foundation construction business, in which the company already operates. The long-term framework agreement with SRV, concluded in connection with the transaction, also provides stability and visibility for the coming years, reducing the risks of the acquisition.

Purchase price is neutral overall

The enterprise value of the transaction is approximately 30 MEUR. Relative to the target's 2024 EBIT (2.6 MEUR), the enterprise value-based valuation multiple (EV/EBIT) is approximately 11.5x. In its financial reports for the current year, SRV has emphasized stronger margin generation in infrastructure construction than in the comparison period. Considering this, it is likely that SRV Infra's EBIT has improved at least somewhat during the current year compared to 2024 levels. The valuation based on actual 2024 figures is roughly in line with multiples based on our current-year forecasts for Kreate, which we believe are slightly elevated. On the other hand, SRV Infra's EBIT margin in 2024 was approximately 4.9%, which is significantly higher than Kreate's current profitability level (2025e adj. EBIT-% 3.2%). Furthermore, as we mentioned earlier, the acquisition target's profitability is likely to continue its upward trend, at least in absolute terms, during the current year, as well. Kreate will finance the acquisition with a new 15 MEUR bank loan, cash reserves, and existing credit limits. In addition, the company has increased its revolving credit facilities by 5 MEUR. In our view, this arrangement will increase Kreate's indebtedness in the short term, but thanks to the company's strong cash flow generation, its debt will decline as early as next year.

Acquisition will increase our projections for the coming years

The transaction is subject to regulatory approval and is expected to be completed before the end of 2025. The deal has no impact on Kreate’s guidance for 2025. The acquisition will impact our estimates starting in 2026. The acquired company is relatively significant in size compared to Kreate (2024 revenue 52.2 MEUR vs. Kreate 2025e 310 MEUR).  The company is also more profitable than Kreate, so the acquisition will support improving profitability in our projections for the coming years.