NOTE strengthens position in defence through acquisition of STI - UK's leading EMS partner for the defence industry, confirms outlook for 2026 and provides outlook for Q1
NOTE has acquired 100 percent of the shares in STI Enterprises Holdings Limited ("STI"), the UK's leading manufacturer of advanced and critical electronics solutions for the defence industry. The acquisition strengthens NOTE's position in the strategically important defence segment, and represents a significant expansion of the Security & Defence segment.
STI is a reputable EMS partner with long experience and deep customer relationships with leading global defence companies. The company operates in all defence domains - air, land, cyber and naval - and operates two high-tech production facilities in Hook and Poynton with extensive capabilities in advanced PCBA, box-build and testing.
STI is expected to have sales of GBP 60 million (~SEK 750 million) in 2026 and has a strong order book. Profitability is on a par with NOTE's. The company has some 300 employees.
"STI is a strategic acquisition for NOTE, with a unique position as a leading EMS partner in the UK and an exceptional complement to our existing business. Their technical excellence and strong customer relationships in defence strengthen our offering and create significant growth opportunities. We look forward to continuing to build a strong European player with long-term sustainable growth together." says Johannes Lind-Widestam, President and CEO of NOTE.
"We are very proud of what STI has achieved in recent years and of the strong trust we have built with leading defence customers. Becoming part of NOTE gives us a strong platform to accelerate our growth, broaden our offering and strengthen our position in the UK and international defence industry. I am delighted to be joining NOTE and feel privileged to lead STI's dedicated team into the next phase, where together we are investing in growth with some of the largest defence companies and OEMs," says Tom Garvey, CEO STI.
The purchase price amounts to GBP 72.5 million on a cash/debt free basis, corresponding to an adjusted EV/EBITDA multiple of approximately 10x. The acquisition has been financed through credit facilities with SEB of SEK 900 million, of which SEK 400 million has a maturity of 12 months.
NOTE confirms outlook for full year 2026 and provides outlook for first quarter
In connection with its Q4 report, NOTE communicated that the start of the year was expected to be weak, followed by a gradual strengthening during the year. This scenario remains, and now also includes the acquisition of STI, which is expected to contribute sales of some SEK 550-600 million for the remainder of 2026. The operating margin for the full year is expected to be 9.5-10.5 per cent.
NOTE's sales for the first quarter, when STI will be included with approximately SEK 20 million, are expected to amount to SEK 930-960 million, with an underlying operating margin of 8.5-9.0 per cent.
NOTE's financial position is strong, with an equity/assets ratio of around 50 per cent at year-end 2025. NOTE expects continued strong operating cash flows for the full year 2026.
Invitation to the presentation
NOTE invites to an online presentation regarding the acquisition of STI. The presentation will take place today, 20 March at 13:00 CET. To view the broadcast, right-click on the link here and select open link. No pre-registration is required to view the webcast. A recording will be available afterwards on the NOTE website www.note-ems.com.
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