Toivo Group Oyj has signed a preliminary agreement to acquire the entire share capital of E-Heat Oy.

Company release, insider information February 14 th 2025 7:00 p.m.

Toivo Group Oyj ("Toivo" or "the Company") has today signed a preliminary agreement ("Preliminary Agreement") concerning the acquisition of the entire share capital of Toivo's associated company E-Heat Oy ("Transaction"), which stipulates the terms under which Toivo will make an offer to the shareholders of E-Heat Oy to carry out the Transaction.

The other parties to the Preliminary Agreement are the founding shareholders of E-Heat Oy, who collectively own approximately 33 per cent of E-Heat Oy ("Founding Shareholders"). Currently, Toivo and the Founding Shareholders together own about 56 per cent of the share capital of E-Heat Oy. In the Preliminary Agreement, the Founding Shareholders have committed to accepting the offer that Toivo will make to the shareholders of E-Heat Oy. The shareholders of E-Heat Oy have agreed on arrangements related to the transfer of shares, based on which Toivo and the Founding Shareholders expect the Transaction to be completed as planned.

Strategic basis for the planned acquisition

Toivo intends to acquire the entire share capital of E-Heat Oy in order to expand its business also into the field of data centre and sustainable energy business. If the transaction is completed, the data centre and energy business would become a strong new pillar for Toivo, creating significant shareholder value for Toivo's shareholders. E-Heat Oy operates in a market that is currently undergoing a strong transformation. In order for E-Heat Oy to take advantage of this development in the best possible way, it needs solid financial, administrative and operational resources. Toivo's goal is to ensure that E-Heat Oy can grow and strengthen its position in the data centre and energy sector. If completed, the acquisition may have a significant impact on Toivo's net sales and operating profit in the medium and long term. The company has significant growth potential and, if successful, the company's business will be more profitable than the real estate business.

Financial terms and timeline of the transaction

The valuation of E-Heat Oy's shares in the Transaction is approximately EUR 12 million. The purchase price is intended to be paid mainly with new shares in Toivo, which Toivo will issue upon completion of the Transaction. The signing of the final transaction agreement is expected to take place during March-April 2025. The Transaction and its terms and conditions will be communicated in more detail once the Transaction Agreement has been signed.

The completion of the transaction is conditional, among other things, on the satisfactory completion of due diligence by Toivo. The transaction also involves terms and uncertainties typical of acquisitions. The Preliminary Agreement signed today does not obligate Toivo to complete the Transaction or any other similar arrangement.

"This acquisition is a significant step for Toivo. We have purposefully built our business and now is the right time to take a step in the direction of data centre and sustainable energy business. E-Heat has enormous potential, and under Toivo's ownership, it has the opportunity to grow and develop into an even stronger player in the midst of the data centre and energy revolution," says Markus Myllymäki, CEO of Toivo Group Plc.

"E-Heat has been promoting energy-efficient solutions for years, and now is the right time to accelerate our growth. Toivo's resources and strategic support will enable E-Heat to enter the next phase of development and strengthen our position in the market," says Lauri Pispa, CEO of E-Heat Oy.

Further information
Markus Myllymäki
CEO
Toivo Group Plc
Tel. +358 (0)40 847 6206
markus.myllymaki@toivo.fi

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About Toivo

Toivo is a Finnish real estate company that was founded in 2015. Its business consists of project development and long-term ownership of apartments. The Company’s business model is unique as Toivo’s business combines the value chain of real estate business from development and construction to ownership, management and rental of a completed property. Toivo manages the entire life cycle of properties with its own team, from raw land development to tenancy agreement negotiations and property maintenance. This way Toivo is able to generate additional value to its customers, shareholders and stakeholders.

Toivo’s strategy is to develop properties in accordance with the Toivo concept. The properties aim for a strong development margin and a stable and attractive return, and in this way enable long-term ownership and the generation of higher additional value to Toivo’s customers. Toivo has a knowledgeable and experienced team of experts with strong merits in the real estate business. The members of Toivo’s team have been involved in the development and construction of over 17,000 apartments, and they have an average of ten years of experience in the real estate business.

Toivo’s revenue in 2023 was EUR 43,7 million and its operating profit was EUR -0,3 million.