Sweco and Vectura join forces – Creating the Nordic region’s leading engineering consultancy with 9,000 employees

Sweco has signed an agreement with the Swedish Government to acquire 100 per
cent of the shares in the consulting engineering firm Vectura with 1,200
employees. The acquisition will create the largest engineering consultancy in
the Nordic market, with annual sales of approximately SEK 8,800 million and
around 9,000 employees. The acquisition is expected to boost Sweco’s operating
profit with SEK 100 million by 2015, including identified synergies of more than
70 MSEK. This is expected to increase earnings per share by nine per cent. The
total purchase consideration amounts to SEK 927 million and will be paid in cash
(equity value).
Vectura is the Nordic region’s leading provider of consulting services for
transport infrastructure and has an especially strong position in the Swedish
railway sector. The company has a presence at some 40 locations in Sweden,
Norway and Denmark. Vectura was formed in 2009 through the merger and
incorporation of the Swedish Road Administration Consulting Services and the
Swedish Railway Administration’s engineering services.  Since then, the company
has shown average annual growth of 7 per cent.

The acquisition is in line with Sweco’s strategy to consolidate its leading
positions in the Nordic region and grow in the infrastructure segment.

“We are delighted to join forces with Vectura and together form the Nordic
region’s leading consulting engineering company. By combining Vectura’s
comprehensive expertise in transport infrastructure with Sweco’s forefront
position in sustainable engineering and design, we will boost our growth in the
Nordic region, in particular in Sweden and also in the fast growing Norwegian
market,” says Tomas Carlsson, President and CEO of Sweco.

Rationale for the acquisition

Sustained value creating growth for Sweco’s shareholders:

  · Consolidates Sweco’s position as the leading consultancy in sustainable
engineering and design.
  · Vectura supplements Sweco’s offering with a market-leading position in the
railway sector.
  · Reinforces both companies’ capabilities in road engineering, project
management and traffic planning.
  · Opens up greater opportunities for expansion in the fast-growing Nordic
infrastructure market, in particular Norway.
  · Realises significant cost synergies, mainly through reduced overhead and
through coordination of administration and facilities.

“Sweco has a powerful offering in sustainable engineering and design and with
our in-depth knowledge and longstanding experience in transport infrastructure,
we complement each other very well. Against this background, it feels great to
unite with Sweco and become even stronger together. The combination is an
excellent move for both our clients and our 1,200 employees,” says Jan
Colliander, President and CEO of Vectura.

The merger will provide new opportunities for the employees, among other things
by giving Vectura’s staff increased opportunities to develop in an international
environment and to use their expertise in other market segments, such as mining,
hydropower and industrial engineering.

The transaction

The total purchase consideration of SEK 927 million will be paid in cash (equity
value). The enterprise value is expected to amount to approximately SEK 900
million on the transaction date.

The transaction is conditional on approval from the competition authorities in
Sweden and Norway, and the goal is for the change of ownership to take place in
August. Vectura will be integrated in Sweco Sweden under the Sweco brand. The
integration is scheduled for completion around year-end 2013.

Impact on Sweco’s income and financial position

In 2012 Vectura reported annual sales of SEK 1,327 million and an operating
profit of SEK 31 million (EBIT). The acquisition is expected to boost Sweco’s
operating profit with SEK 100 million by 2015. Sweco’s earnings per share are
expected to increase by SEK 0.47 including synergies, or 9 per cent from 2012’s
level. Long-term business is expected to perform with the same profitability as
Sweco's current infrastructure activities.

The improvement in earnings will be achieved primarily through the realisation
of cost synergies, e.g., reduction of external corporate costs, coordination of
administration and co-locations of operations. Combining Vectura’s operations in
Norway and the Traffic & Urban planning businesses with Sweco’s operations, will
enhance their profitability. Identified synergies exceed SEK 70 milllion.

The integration costs are estimated at SEK 100 million and will be recognised
mainly in the second half of 2013 and first half of 2014. Transaction costs
amount to approximately SEK 5 million and will be recognised in the second
quarter of 2013.

The acquisition will be financed through a combination of existing loans and a
new three-year credit facility. The financing cost is around 3 per cent.

Sweco’s financial target is that the net debt should not exceed 40 per cent of
equity. As a consequence of the acquisition and its financing, this level will
be exceeded, which can be permitted temporarily as long as it takes place with
balanced risk. Sweco’s financial target is to maintain a net debt position over
time, while at the same time upholding a capital structure that enables
development and investment in the Group’s core business.

Illustrative         Sweco  Vectura  Adjustment    Combined
income
statement
2012, SEK
millions

Operating            7,504    1,326                   8,830
income
Operating           -6,747   -1,295                  -7,972
expenses
EBITA                  757       31          70         858
EBITA margin         10.1%     2.3%                    9.7%

Amortisation,          -75        0         -12         -88
depreciation
and impairment
losses
EBIT                   682       31          58         770
(operating
profit)
EBIT margin           9.1%     2.3%                    8.7%

Net financial          -29       -1         -29         -58
items
Profit before          653       30          29         712
tax

Income tax            -177       -6          -9        -192
expense
Profit for the         476       24          20         519
period

Non                     -6                               -6
-controlling
interests
Profit                 470       24          20         514
attributable
to owners of
the Parent
Company

Earnings per          5.15     0.26        0.22        5.63
share

The presented financial information has not been reviewed by the company’s
auditors. The information is based on a combination of the two company’s annual
accounts for 2012. Adjustments have been made to reflect the anticipated
synergies and estimated consequences of the transaction.

The combined figures are hypothetical and should not be seen as pro forma
accounts, since only rough adjustments have been made for the acquisition. No
adjustments have been made for integration or transaction costs.

Press conference today at 10:00 a.m.
Sweco will present the details of the transaction at Carnegie, Regeringsgatan
56, in Stockholm. The speakers will be Sweco’s President and CEO Tomas Carlsson,
Sweco’s CFO Jonas Dahlberg and Vectura’s President and CEO Jan Colliander. The
presentation can be viewed at www.swecogroup.com.
For more information contact:

Tomas Carlsson, President and CEO of Sweco, tel: +46 8 695 66 60, +46 70-552 92
75

Jonas Dahlberg, CFO of Sweco, tel +46 8-695 63 32, +46 70-347 23 83

Jan Colliander, President and CEO of Vectura: +46 10-484 43 00
Sweco is an international consulting group with combined expertise in consulting
engineering, environmental technology and architecture. Sweco has annual sales
of approximately SEK 7.5 billion and around 7,800 employees in the Nordic region
and Central and Eastern Europe. The company has projects currently underway in
some 80 countries worldwide. Sweco is listed on NASDAQ OMX Stockholm AB.

Sweco discloses the information provided herein pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. The information was
submitted for publication at 08:20 CET on 17 June 2013.