Translation: Original published in Finnish on 11/28/2025 at 07:30 am EET

Thursday's news of the Foodhills acquisition was expected. Once the transaction is completed, Apetit can advance measures related to the development of the acquired target and disclose these plans to investors. For now, we see the acquisition as a risk-increasing measure, despite the low purchase price. The unveiling and successful execution of plans aimed at a profitability turnaround could gradually alleviate this uncertainty.

The transaction received regulatory approval

Apetit announced on Thursday, November 27, that the Foodhills acquisition was completed. The acquisition was first announced on October 9. The completion of the transaction required approval from the Swedish ISP (Inspektionen för strategiska produkter) authority.

A loss-making pea producer

The acquisition target, Foodhills AB, cultivates and produces frozen peas in the Skåne area. The operation is very similar to what Apetit has long experience with in Säkylä. However, the profitability of the acquired target has been heavily in the red for several years (2024 revenue: 168 MSEK, EBIT: -55 MSEK). We expect Apetit to provide more information soon on its efforts to improve the profitability of the acquired business. Our estimates include a gradual profitability turnaround, but the estimate is subject to considerable uncertainty.

The acquisition fits Apetit and was inexpensive from a balance sheet perspective

In Apetit's strategy, increasing exports and strengthening its market position in Sweden are key focus areas, which supports the acquisition's logic. Foodhills has invested significantly in its production plant (over 200 MSEK since 2018), against which the valuation of the acquired target in the transaction is low (EV: 60 MSEK). Because the transaction price is clearly lower than the balance sheet value, Apetit will record significant non-recurring profit from the transaction in Q4. According to Apetit, the operating earnings impact for the group is neutral or slightly negative in the short term, but in the longer term, the impact is estimated to be slightly positive.

Negative earnings raise the risk level

We estimate that the completed acquisition has raised the company's risk profile and increased earnings-based valuation multiples for 2026 (estimated EV/EBIT 2026-27e: 13x and 9x). Our knowledge of the company's plans is very limited for the time being. Unveiling of plans and the progress of the profitability turnaround could be positive drivers that could alleviate the uncertainty surrounding the stock.