An interesting business with room for margin improvements
Vestum announced the acquisition of the UK-based company PDAS, an add-on acquisition to Pump Supplies. PDAS is a UK market leader in proactive maintenance and intelligent monitoring of wastewater pumping stations. We understand that the business consists of three different parts: design, installation, and proactive (monitoring), with revenues relatively evenly split between the three. What excites us most is the proactive part, which involves monitoring of wastewater pumping stations, where PDAS has developed a digital monitoring system that is sold on a subscription basis. As such, proactive is not only the fastest-growing part of PDAS, it also produces higher margins. PDAS as a group generates ~SEK 200m sales and ~SEK 22m EBITA (~11% margins), while our assessment is that profitability in proactive is +20% (currently comprising ~60% of EBITA, according to the company). Over time, we therefore see good potential for PDAS to grow sales and increase its margins to >15%.
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