Translation: Original published in Finnish on 10/28/2026 at 7:40 am EET.

Auroora Group announced that it is acquiring the Labko business from Wavin Finland Oy. With revenue of ~10.5 MEUR, the business is a significant addition to the company’s smallest segment to date, Clean Water and Environmental Technology. We also see the business as a good fit for both the segment and Auroora Group, although the lack of more detailed financial figures for Labko limits our analysis. We will incorporate the acquisition into our forecasts with the company’s Q3 report at the latest.

A strategic and sizable addition to environmental technology

Labko is Finland’s leading provider of separation systems and a well-known brand in wastewater solutions for sparsely populated areas. The business has revenue of ~10.5 MEUR and 40 employees. It will be integrated into Auroora Group’s Clean Water and Environmental Technology segment, which has so far been clearly the group’s smallest business area. Relative to the segment, Labko is a significant addition, as our pre-acquisition forecast put segment revenue at ~24 MEUR this year. At group level, the acquisition adds just under 4% to our current-year revenue forecast of 267 MEUR. We believe the acquisition complements the offering of the segment’s existing companies, Vestell and Avalon Nordic, well. The employees will transfer to Auroora as part of the business transfer. Auroora will also acquire the customer relationships related to the business, the Labko trademark and related intellectual property rights, and the Kangasala production property.

The Clean Water and Environmental Technology segment has historically been the weakest link in Auroora’s profitability, although it showed signs of recovery in the Q2 results. Part of this improvement, however, came from the profitable Rasmix acquisition made earlier in the year.

Anticipated step in capital allocation

Auroora did not disclose the purchase price or Labko’s profitability figures in its press release. Under Auroora’s acquisition criteria, a target’s adjusted EBITA margin should exceed 10% and the purchase price should fall within a range of 4–8x EBITA. The company stated in the release that the acquisition meets its investment criteria, so we assume the terms are in line with them. Auroora Group targets 4–8 acquisitions per year and has completed three so far this year, with the spring IPO causing a brief pause in acquisitions. The company has commented, however, that the M&A pipeline has looked strong in both quantity and quality since the IPO, and we consider it very likely that further deals will be announced during the rest of the year. Auroora Group’s balance sheet is also very strong following the IPO (Q2'26 net debt/adj. EBITDA 0.7x, target below 2x), leaving plenty of firepower for acquisitions.

We will incorporate the transaction into our forecasts with the Q3 report at the latest. The transaction is expected to close by the end of 2026.