NKT has acquired SolidAl from NJord Partners for EUR 192 million. It will invest in additional capacity at the existing site of the Portugal-based power cable company, adding medium and high-voltage capacity to meet the growing demand from grid upgrades and renewable energy projects across Europe.
Jul 10, 2024
NKT has acquired SolidAl, a Portugal-based power cable company from Njord Partners, adding medium and high-voltage capacity to meet the growing demand from grid upgrades and renewable energy projects across Europe. As part of the acquisition deal worth EUR 192 million, NKT will invest in additional capacity at the existing site.
The acquisition supports NKT’s growth strategy and will increase medium and high-voltage capacity up to 225kV; improve the competitiveness of NKT’s product offering and geographical reach across new and existing markets; provide a competitive, competent and expandable platform for future growth to serve increased demand; and support NKT’s medium-term ambitions, including RoCE above 20 percent.
A release issued by NKT says that as the electrification of society continues to gain momentum, power generation and consumption is increasing. Upgrading Europe’s aging power grid infrastructure and connecting a growing number of renewable power projects is driving demand for medium and high-voltage power cables. According to the International Energy Agency (IEA), reaching national climate goals requires adding or refurbishing a total of more than 80 million km of power grids by 2040, the equivalent of the entire existing global grid and the European Union estimates that Europe will need to invest EUR 584 billion to upgrade its power grids this decade.
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“SolidAl provides a strong strategic fit in terms of capacity and competence, strengthening NKT’s position in serving customers with end-to-end grid solutions, particularly the growing demand for medium- and high-voltage power cables up to 225 kV. We look forward to welcoming SolidAl’s highly skilled employees to NKT and continuing our growth journey together. With more than 50 years in the industry, SolidAl will complement the competitiveness of the product mix from NKT’s existing factories in Asnaes, Velke Mezirici and Cologne focusing on delivering the full range of power cables for the grid at a larger scale,” says Claes Westerlind, President and CEO of NKT.
“NKT’s acquisition of SolidAl is a testament to our team’s dedication and hard work. NKT is a widely recognized worldwide leader in the manufacturing of power cables and accessories, and I could not think of a better owner to support SolidAl in expanding its commercial reach and technical capabilities,” says François Moufflet, CEO, SolidAl.
As part of the acquisition, NKT will invest an additional EUR 50m to expand the medium- and high-voltage capacity at the existing site. The new production capacity is anticipated to be operational in 2027. The acquisition, including the investment, is expected to support NKT’s medium-term financial ambitions including delivering RoCE above 20 percent.
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The transaction is unconditional, and closing is effective as of today. The acquisition was funded within the existing capital structure. NKT remains committed to a conservative capital structure with leverage ratio up to 0.0x catering for the investment programs ongoing and enabling the high-voltage projects.
Adding an established production footprint in Southern Europe will enhance NKT’s geographical footprint and reach in selected key markets. SolidAl’s strong presence in France, UK, Ireland, Spain, and Portugal expands NKT into new markets and strengthens its existing foothold in others.
