Information on the Target

MG Link AS ("MG Link"), with majority ownership by Norvestor VIII SCSp ("Norvestor VIII"), has finalized an agreement to acquire 100% of PCS Modulsystem AB ("PCS" or "the Company"), a Swedish enterprise specializing in modular building solutions tailored for educational institutions, healthcare facilities, and office environments.

This acquisition marks a strategic move for MG Link, which was previously under the majority ownership of another Norvestor VIII affiliate, CIC Hospitality. The acquisition aims to establish a dedicated standalone group with a specific focus on delivering modular construction solutions throughout the Nordic region. The founders and management team of MG Link, Egil Messmer and Ronny Granli, are notable for their previous roles in founding Wexus AS, a venture backed by Norvestor VII, L.P. from 2017 to 2020.

Industry Overview in Sweden

The modular construction industry in Sweden has been on the rise, driven by increased demand for efficient and sustainable building solutions. With an expanding public sector investment in educational institutions and healthcare, firms like PCS have found a lucrative niche in creating adaptable modular facilities. In recent years, the Swedish government has emphasized the importance of sustainability in construction, prompting many companies to embrace modern building practices that align with environmentally friendly standards.

Moreover, the modular construction market presents unique opportunities due to the shorter lead times associated with factory-built modules. This method of construction not only enhances speed but also reduces waste, aligning well with national goals for reduced carbon emissions. The growing awareness among developers and municipalities regarding the benefits of off-site construction further augments the appeal of modular solutions.

In the context of the Nordic economies, Sweden has emerged as a leader in innovative construction methodologies. Companies like PCS, which offer high-quality, wood-based modular facilities, contribute to a competitive landscape characterized by strong revenue visibility and customer retention. As public sector contracts dominate, firms are positioned to experience steady and predictable income flows.

Finally, the emphasis on flexible building solutions continues to grow as urbanization increases and demographic changes arise. As the need for adaptable educational and healthcare facilities becomes more pronounced, the modular construction sector in Sweden is poised for continuous growth.

The Rationale Behind the Deal

The acquisition of PCS aligns with Norvestor's strategic objective to invest in and scale high-potential mid-market companies within the Nordic region. By integrating PCS's strong market presence and operational model with MG Link's established framework, the deal aims to leverage combined strengths to meet rising demand for modular construction solutions.

Additionally, the partnership is expected to enhance operational efficiencies and market reach, allowing both MG Link and PCS to capitalize on synergies and drive growth in a competitive landscape. This collaborative approach is anticipated to create compelling value for stakeholders, including customers and investors.

Information About the Investor

Norvestor is a prominent private equity firm specializing in mid-market buyouts across the Nordic region. Established in 1991, the firm boasts a highly experienced team that has successfully executed 93 investments, 500+ add-on acquisitions, and 61 exits, including 16 initial public offerings (IPOs). Norvestor focuses on growth companies in the Nordic mid-market with aspirations to attain leading positions, both regionally and internationally.

The firm employs a strategic investment approach that includes organic growth initiatives, acquisitions in fragmented industries, and geographic expansion. Norvestor's proven track record and robust network place it in an advantageous position to support MG Link and PCS in their growth trajectory. For more information, please visit www.norvestor.com.

View of Dealert

The acquisition of PCS Modulsystem by MG Link, backed by Norvestor, presents a positive investment opportunity for several reasons. First, PCS operates in a burgeoning modular construction market in Sweden, which offers considerable growth potential as public sector demand for flexible and sustainable building solutions continues to rise.

Second, the combined expertise of MG Link's management and PCS's established operational model creates a solid foundation for driving future growth. Both companies are committed to innovation and customer satisfaction, ensuring that they can adapt to market needs while maintaining profitability.

Furthermore, the expectations surrounding the construction industry in Sweden favor modular solutions, particularly as sustainability becomes an increasingly critical factor in public procurement processes. This alignment positions the combined entity as a frontrunner in responding to these emerging trends.

In summary, the collaboration between MG Link and PCS, supported by Norvestor's extensive resources and experience, not only appears strategically sound but has the potential to yield significant value for investors and stakeholders in the coming years.

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