”We
see great potential in the acquired business as it will now be
integrated in a business focused on packaging paper. The acquisition
will give us a strong platform to continue developing our offering
within smarter packaging solutions. In addition, the acquisition
significantly reduces our pulp exposure and adds a much larger Euro cost
base, which we view positively.” says Per Lindberg, President and CEO
of Billerud.
The
acquisition includes one paper machine in Pietarsaari and one paper
machine in Tervasaari, both in Finland. Both machines rank among the
largest and most efficient of its kind in Europe and are assessed as
well invested and well maintained. The machines produce packaging paper
(sack/kraft paper) used in a broad range of areas such as food, retail,
construction and other industries. Annual production capacity is
approximately 300,000 tonnes. The business has approximately 185
employees. Other activities at the mill sites will remain owned and
operated by UPM.
Annual
net synergies are estimated to approximately SEK 30 million with full
financial impact from year-end 2013. Synergies are mainly obtained
through increased production flexibility within the Billerud Group.
One-off costs associated with the separation of the acquired business
from UPM is estimated to approximately SEK 22 million during 2012.
The
acquired business achieved sales of approximately EUR 220 million (SEK 2
billion) and EBITDA of approximately EUR 18 million (SEK 165 million)
in 2011 (pro forma).
The
acquisition is expected to be cash flow positive from day one after
closing. With full effect from synergies Billerud’s earnings per share
is expected to increase by approximately SEK 1.20.
Long-term
agreements have been signed between the parties where UPM, among other
things, will deliver production inputs such as pulp, steam and
electricity to Billerud. In the signed pulp agreement Billerud will
purchase pulp at market price. Following the transaction, Billerud will
purchase an annual pulp volume corresponding to approximately 85% of
Billerud’s current market pulp sales volume. As a result, the
acquisition will significantly reduce Billerud’s exposure to pulp market
and Billerud will therefore no longer report sales of market pulp
separately.
The acquisition is subject to applicable regulatory clearances.
The
acquisition will be financed by a combination of cash at hand and debt
via existing credit facilities. The impact on Billerud’s net debt/equity
ratio is +24 percentage points. The new net/debt ratio is assessed to
be well below the Group’s target level, like-for-like. In case the
acquisition is not completed Billerud has agreed to pay UPM a
termination fee of EUR 5 million.
Macquarie Capital acted financial advisor and Cederquist acted as legal advisor for Billerud in the transaction.
For further information please contact:
Per Lindberg, President and CEO, +46(0)8-553 335 01, +46(0)70-248 15 17
Susanne Lithander, CFO,+46(0)8-553 335 07, +46(0)73-037 08 74
The
information is such that Billerud AB is obligated to publish under the
Swedish Securities Market Act. Submitted for publication at 08.40 CET, 1
February 2012. This press release has been prepared in a Swedish, an
English and a Finnish version. In the event of variations between the
language versions, the Swedish version shall take precedence.