Administer - Deeper into the public sector
Administer announced a second intended acquisition from Sarastia, this time targeting the financial and payroll services business of the wellbeing services county customers.
- Administer announced yesterday that it has signed a letter of intent to acquire the financial and payroll services business of Sarastia’s (Numera Palvelut Oy) wellbeing services county customers. This complements the previously announced municipal customer deal, which is pending authority approval.
- The business to be transferred is estimated to generate ~EUR 23m in revenue in 2025E and employs ~140 people, adding ~30% to Administer’s current scale on top of the ~50% expected increase from the municipal business. Profitability is higher than in the municipal business, with 2025E EBITDA of EUR 2.1m (9.2% margin, 24.8% in 2024), materially improving the overall profitability profile of businesses to be acquired.
- The transaction structure mirrors the municipal deal and will be completed in two phases. In the first phase, Administer will acquire the wellbeing services county business through the same subsidiary that holds the municipal business, initially owning 80% with Numera 20%. The business will continue under the Sarastia brand. The phase-one purchase price is EUR 3.7m (50% cash / 50% new Administer shares), with the remaining 20% to be acquired by summer 2029 at a pre-agreed valuation.
- We see strategic rationale as this deal completes the offering across both municipal and wellbeing segments, strengthening competitiveness in the public sector. Value creation potential remains meaningful given attractive pricing and potential cost efficiencies, but uncertainties persist, including execution and integration risk and potential customer churn.
- The aim is to complete both acquisitions simultaneously by the end of 2025. Administer has indicated it will specify its guidance for 2025 if the transactions close.