Valmet acquires 14.9% ownership in the future Neles
Valmet Oyj’s stock exchange release (inside information) on June 17, 2020 at 8:45 a.m. EET
Valmet has today agreed to acquire 22,374,869 shares in the future Neles Corporation from Solidium Oy, representing 14.88% of all Neles’ shares and votes. The transaction between Valmet and Solidium is expected to take place on July 1, 2020.
Neles Corporation is planned to be created in the partial demerger of Metso, in which Metso’s Flow Control business would become the independent Neles Corporation and would continue Metso’s listing on Nasdaq Helsinki. The completion of the partial demerger is currently expected to take place on June 30, 2020 (pending final merger control approvals).
After the partial demerger, Neles will be an independent globally leading diversified valve, valve automation and service company with net sales in 2019 amounting to EUR 660 million and adjusted EBITA margin to 14.6%. Neles’ headquarters are located in Vantaa, Finland and the company has operations in more than 40 countries worldwide with approximately 2,900 employees.
Approximately 70% of Neles’ net sales is recurring business. Neles’ business is well diversified across process industries and regions, with 26% of net sales coming from the pulp and paper industry. Since 2011, Neles’ orders received have grown by approximately 5% annually and the profitability has improved.
Comment from Pasi Laine, President and CEO of Valmet
“Neles is a good quality global company with a large share of recurring business and a strong position in the pulp and paper industry. It has demonstrated good growth and has potential to grow further.
We have today agreed to acquire a minority share in Neles and our target is to increase our ownership when Neles’ share price supports additional purchases. Valmet’s goal is to have an active long-term role in the development of Neles.
The strategic rationale of the share acquisition is further supported by the fact that Valmet and Neles have a common heritage, serve similar global industries and benefit from same global megatrends.”
Transaction details
The agreed purchase price is EUR 8.00 per share, corresponding to a total transaction value of EUR 179 million at the signing, paid 100% in cash. The price will be adjusted based on Neles’ share price development during certain limited time period after the completion of the partial demerger of Metso. The possible adjustment is paid or received by Valmet in cash. The adjustment agreed is customary and capped, and will not have a material impact on the transaction value.
The agreement includes a one-year lock-up period, during which Valmet may not dispose its shares in Neles without Solidium’s approval. Solidium retains the right of first refusal for a period of three years after the closing. In addition, the agreement includes an anti-embarrassment clause, according to which Solidium could be entitled to an additional cash payment in certain circumstances where Valmet would acquire or dispose shares in Neles at a higher price during a three year period after the closing.
Valmet will finance the share acquisition with a new loan facility.
Conference call for analysts, investors and media
To discuss the share acquisition’s strategic rationale and other details, Valmet will arrange a conference call in English for analysts, investors, and media on Wednesday, June 17, 2020 at 3:30 p.m. Finnish time (EET).
Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at +44 (0) 2071 928000. The participants will be asked to provide the following conference ID: 6166418.
The conference call can be followed through a live audiocast at www.valmet.com/webcasts.
Further information, please contact:
Pasi Laine, President and CEO, Valmet, tel. +358 10 672 0001
Kari Saarinen, CFO, Valmet, tel. +358 50 317 1830
Anu Salonsaari-Posti, Senior Vice President, Marketing and Communications, Valmet, tel. +358 10 672 0033
Pekka Rouhiainen, Director, Investor Relations, Valmet, tel. +358 10 672 0020
VALMET
Kari Saarinen
CFO
Pekka Rouhiainen
Director, Investor Relations
Valmet is the leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries. We aim to become the global champion in serving our customers.
Valmet’s strong technology offering includes pulp mills, tissue, board and paper production lines, as well as power plants for bioenergy production. Our advanced services and automation solutions improve the reliability and performance of our customers’ processes and enhance the effective utilization of raw materials and energy.
Valmet’s net sales in 2019 were approximately EUR 3.5 billion. Our more than 13,000 professionals around the world work close to our customers and are committed to moving our customers’ performance forward – every day. Valmet’s head office is in Espoo, Finland and its shares are listed on the Nasdaq Helsinki.
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