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Valmet acquires Process Automation Systems business from Metso: Valmet becomes stronger, more stable and more profitable as a result of the acquisition

Valmet Corporation's stock exchange release on January 15, 2015 at 9:30 a.m. EET

Valmet Corporation and Metso Corporation have signed an agreement on the sale of Metso's Process Automation Systems business to Valmet on January 15, 2015. The enterprise value of the acquisition is EUR 340 million. The acquisition will be financed with committed long-term financing. It is estimated that the acquisition will be completed by April 1, 2015. The completion of the transaction is subject to approval by the competition authorities.

The acquired operations supply process automation and information management systems and related applications and services to the pulp, paper, energy and other process industries. The purchased operations employ about 1,600 people. Net sales for 2013 amounted to approximately EUR 300 million.

Combination of Valmet and Process Automation Systems creates unique customer offering

As a result of the acquisition, Valmet will become a stronger and unique technology and services company in its field, with a full automation offering. The acquisition strengthens Valmet's competitiveness by combining paper, pulp and power plant technology offering, services, process know-how and automation into one customer value-adding entity. Approximately 80 percent of Process Automation Systems sales comes from Valmet's current customer industries and the rest from other process industry clients.

Process Automation Systems is a strong, established business

The business being acquired is a strong business, with established customer relations and a high level of technology and know-how. About 1,600 automation professionals work close to customers at approximately 80 locations around the world. The share of services business in the acquired business is significant, accounting for approximately 45 percent of net sales in 2013, and is based on large installed automation base and a captive business model. The acquired business has a good financial track record and stable cash flow.

The acquisition makes Valmet more stable and more profitable

Net sales of the Process Automation Systems business is approximately EUR 300 million, of which Valmet has accounted for approximately 10 percent. Therefore the acquisition increases the share of stable high-margin business of Valmet's net sales by approximately EUR 270 million.

Process Automation Systems has a solid financial track record, with slight growth and relatively stable margins during the last 10 years. EBITA margin (earnings before interest, taxes and amortization) for Process Automation Systems has been approximately 10-12 percent.

Through the acquisition, Valmet strengthens its offering and continues to develop its business. Significant cost synergies are not expected to be achieved.

Valmet's balance sheet remains strong also after the acquisition. To illustrate, if the acquisition had taken place at the end of September 2014, Valmet's gearing after the acquisition would have been be approximately 23 percent and equity ratio approximately 35 percent, based on illustrative figures of the acquired business at the end of September 2014.

Pasi Laine, President and CEO of Valmet Corporation: With the acquisition we create a unique customer offering and strengthen further our leading market position 

"Through the acquisition of Process Automation Systems, Valmet will become a technology and service company with full automation offering. The acquisition will help Valmet in increasing its business stability, while also improving profitability. By combining paper, pulp and energy technology, process know-how, services and automation, we can serve our customers even better than before and move our customers' performance forward. This transaction has an excellent fit with our existing strategy and the timing is right for Valmet," says Pasi Laine, President and CEO of Valmet Corporation.

News conference for analysts, investors and media

Valmet will arrange a news conference in English for investment analysts, investors, and media on January 15, 2015 at 1:00 p.m. Finnish time (EET). The news conference will be held at Valmet's head office, Keilasatama 5, 02151 Espoo, Finland. The conference can also be followed through a live webcast at www.valmet.com/webcasts.

It is also possible to take part in the news conference through a conference call. Conference call participants are requested to dial in at least ten minutes prior to the start of the conference, at 12:50 p.m. (EET), at +44 1452 560304. The participants will be asked to provide the following conference ID: 67179921.

During the webcast and conference call, all questions should be presented in English. After the webcast and conference call, media has a possibility to interview the management in Finnish.

Further information, please contact:
Pasi Laine, President and CEO, Valmet Corporation, tel. +358 10 672 0001
Markku Honkasalo, Chief Financial Officer, Valmet Corporation, tel. +358 10 672 0008
Anu Salonsaari-Posti, SVP, Marketing and Communications, Valmet Corporation, tel. +358 10 672 0033
Hanna-Maria Heikkinen, VP, Investor Relations, Valmet Corporation, tel. +358 10 672 0007

VALMET CORPORATION

Markku Honkasalo
CFO

Hanna-Maria Heikkinen
VP, Investor Relations

Valmet Corporation is a leading global developer and supplier of services and technologies for the pulp, paper and energy industries. Our 11,000 professionals around the world work close to our customers and are committed to moving our customers' performance forward - every day.

Valmet's services cover everything from maintenance outsourcing to mill and plant improvements and spare parts. Our strong technology offering includes entire pulp mills, tissue, board and paper production lines, as well as power plants for bio-energy production.

Valmet's net sales in 2013 were approximately EUR 2.6 billion. Valmet's objective is to become the global champion in serving its customers.

Valmet's head office is in Espoo, Finland and its shares are listed on the NASDAQ OMX Helsinki Ltd.

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