Translation: Original published in Finnish on 10/29/2026 at 7:35 am EET.

Auroora Group announced that it is acquiring a majority stake in Coating Source Oy, an importer of roof paints and coatings. With revenue of around 6.0 MEUR, the target is in our view a typical fit for Auroora. The transaction reflects Auroora’s strong M&A pipeline, as the company announced another significant acquisition, Labko, only a day earlier. We will add the Coating Source and Labko acquisitions to our forecasts in our next update.

The acquisition target has a history of profitable growth

Coating Source specializes in professional roof paints and coatings, which it sells directly to contractors in Finland. The company's revenue for the last financial year was ~6.0 MEUR, and based on public information, its profitability is at an exceptionally strong level (2025 EBIT margin of 17%). Although the purchase price was not disclosed, we assume that the target meets Auroora's general acquisition criteria, namely a valuation of 4–8x EV/EBITA (and an EBITA margin of over 10%, which the target meets according to public information). The founder of Coating Source will continue as the company's CEO and shareholder, which we consider encouraging for the continuity of operations. The exact ownership stake of Auroora is not yet known.

The acquired business will be integrated into the Industrial Products and Services segment, which has historically been Auroora's clearly most profitable business area. Auroora has also commented that it focuses its acquisitions precisely on this segment. This is partly because the pool of potential targets is broader than in other segments, and valuation multiples in the Electrification and Automation segment are elevated due to the sector's strong outlook.

Source: Finder

The M&A pipeline is delivering at a rapid pace

Just a day before this deal, Auroora announced the acquisition of Labko, an environmental technology business with revenue of ~10.5 MEUR. Together, the two consecutive deals add ~16.5 MEUR of inorganic revenue, equivalent to ~6% of our current-year revenue forecast (267 MEUR). Auroora targets 4–8 acquisitions per year, and this is its fourth of the year. In our view, the recent acquisitions are good evidence of the quality of the company’s M&A pipeline. In a compounder model, the valuation paid in acquisitions is naturally critical for value creation, and there is no visibility into it yet. We will likely be able to assess this from the company’s upcoming reports (Q4'26).

The transaction is expected to close in November 2026. We will add it and the Labko business to our estimates in our next update.