M&A Activity • Oct 9, 2014
Preview not available for this file type.
Download Source FileCompany Announcement No. 301, 2014
Copenhagen, Denmark, 2014-10-09 12:07 CEST (GLOBE NEWSWIRE) --
H+H International A/S
Dampfærgevej 3, 3rd Floor
2100 Copenhagen Ø
Denmark
Telephone: +45 35 27 02 00
www.HplusH.com
Company reg. no. 49 61 98 12
H+H signs agreement to acquire GRUPA Ozarow's aircrete activities in Poland
It is expected that the combined Polish aircrete activities will gain from
economy of scale in the competitive Polish market and will be able to capture
significant cost and efficiency synergies.
Today, H+H International A/S’ subsidiary H+H Polska Sp. z o.o. has signed an
agreement with Grupa Ozarow S.A. to acquire 100% of the shares in its Polish
aircrete company Grupa Prefabet S.A. for a total consideration of PLN 60
million (DKK 108 million) (enterprise value). The purchase price will be paid
according to an agreed deferred payment schedule. Closing of the transaction is
subject to customary approval by the Polish competition authorities. The
transaction is expected to close around year-end 2014.
Grupa Prefabet Sp. S.A. is one of the main aircrete producers in Poland with
five production plants. Revenue in 2013 was DKK 133 million and EBIT was
slightly negative. The company employs approximately 325 persons. Grupa
Prefabet S.A. is 100% owned by Grupa Ozarow S.A., a leading manufacturer of
cement in Poland.
Poland is the biggest aircrete market in Europe, but activity levels have
dropped significantly in recent years due to the market economic slowdown,
which has led to extensive overcapacity and lack of profitability among
producers. H+H International A/S has earlier stated that there is a need for a
restructuring of the Polish market.
Michael T. Andersen, CEO of H+H International A/S says:
“This is in line with our announced strategy of consolidating H+H’s position as
one of the leading European aircrete suppliers and become the overall number
one within our chosen geographical footprint. It is expected that the combined
Polish aircrete activities will gain from economy of scale in the competitive
Polish market and will be able to capture significant cost and efficiency
synergies. We see this as a perfect match and an excellent opportunity to
create value for the H+H shareholders.”
Transaction details
The agreed purchase price is DKK 108 million (enterprise value) in cash. The
purchase price will be paid according to an agreed deferred payment schedule
where approximately DKK 40 million will be paid at closing and the remaining
amount will be payable in two instalments by mid-2016 (DKK 32 million) and by
mid-2017 (DKK 36 million), respectively. As part of the restructuring plan, it
is expected that H+H will be able to sell combined Polish assets over the
coming years at a value exceeding DKK 70 million. Additional investments of DKK
15-20 million are expected to be required in order to support the
restructuring.
The transaction is financed with bank debt within existing credit facilities of
H+H. However, upon closing of the transaction it is the intention to strengthen
the capital base through an issue of new shares.
Call for an extraordinary general meeting
Within the next 14 days, the Board of Directors of H+H International A/S
expects to call for an extraordinary general meeting with the following
proposals:
The motivation for the proposed reduction of the share capital and of the
denomination of the Company's shares is to facilitate that the potential
capital increase can be carried out, as the Company may not issue new shares
below nominal value.
The change in denomination is purely technical and the number of shares will
remain unchanged and so will, all else equal, the share price. If you, as a
shareholder, owned 100 shares before the reduction of the denomination and the
share price was DKK 45 then you will still own 100 shares after the reduced
denomination and the share price will, all else equal, still be DKK 45. The
change in denomination will not change the actual share price, all else equal.
The ownership structure in H+H will also remain unchanged as a consequence of
the reduction in the denomination.
The six largest shareholders of H+ H International A/S, representing around 38%
of the total share capital, support the acquisition of Grupa Prefabet S.A. and
the above proposals.
Outlook 2014
As the transaction is expected to close year-end, the financial impact on the
P&L for the year is insignificant. Transaction costs will be recognised as
special items and therefore have no impact on the previously announced guidance
for 2014.
Outlook 2015 and beyond
Provided that the transaction is approved before the end of 2014, it is
expected that EBITDA in 2015, excluding special items, will increase by
approximately DKK 10 million, among others due to planned synergies, and that
working capital can be reduced by DKK 15-20 million. Integration costs,
recognised as special items, will be approximately DKK 20 million. Over the
next four years, it is the ambition to increase the EBIT margin for the
combined Polish activities to a level in line with H+H’s long-term EBIT margin
target of over 6%, assuming that the Polish market conditions improve and that
the restructuring plan progresses as scheduled.
Advisors
SEB Corporate Finance acted as financial advisor and Accura Advokatpartnerskab
acted as legal advisor to H+H International A/S.
Telephone conference
There will be a telephone conference today at 14:00 o'clock, where Michael T
Andersen, CEO, will present the main message of this company announcement
incl.Q&A. A brief presentation can be downloaded from www.HplusH.com.
Dial-in: +44 (0) 2031 808080 (UK)
Dial-in: +45 32 72 80 20 (DK)
Conference code: 6903846583
Kent Arentoft
Chairman of the Board of Directors
Michael T Andersen
CEO
For additional information please contact:
Michael T Andersen, CEO, on telephone +45 35 27 02 00 or Kent Arentoft,
chairman of the Board of Directors, on telephone +45 43 50 02 09.
This is a translation of the company's announcement in Danish. In case of
inconsistency between the Danish text and this English translation, the Danish
text will take precedence.
Have a question? We'll get back to you promptly.