Duroc

M&A Activity • Nov 7, 2023

DUROC RAIL IN A STRATEGIC PARTNERSHIP WITH LKAB

7 th of November 2023

Duroc has entered into a strategic partnership with LKAB, which aims to jointly develop the offer within maintenance of railway wheels and related components. The collaboration implies that LKAB acquires 49 percent of the shares in Duroc Rail AB (Rail), for a preliminary purchase price amounting to approximately MSEK 75 and will together with Rail develop and build a "state of the art" production facility in Luleå.

The new facility, which will be owned by LKAB and used by Rail, is expected to be completed in the end of 2025. The investment allows an increased flexibility and productivity and will have the dimensions necessary to support Rails expected future growth that the industrial developments in the Northern part of Sweden will entail.

Since the purchase of Rail in the late 90's, Duroc has formed the company into the strong position it has today and has continuously invested and developed the business to the current standard. Rail has been, and will continue to be, a vital part of the rail traffic in the Northern part of Sweden and the collaboration is therefore a natural step in Rails future growth journey.

" I am very satisfied with the agreement with LKAB, one of our most important customers. Rail needs new premises and through LKAB taking a minority position in the company, we can secure the development and the capacity for the future, where we see that the green shift in the industrialisation will require larger volumes and more effective maintenance of railway wheels. We will continue to invest in Rail, and continue to develop the offer to all customers in the region which creates favourable conditions for further growth. We are happy that our more than 100-year-old business with 50 employees continues to evolve in Luleå" says the CEO of Duroc, John Häger

The sale of 49 percent of the shares in Rail will significantly strengthen Durocs already strong financial position, which further opens up for future investments. Through the acquisition, the group is proforma near debt free with an equity of approximately MSEK 1 150, and an equity to asset ratio of 60 percent.

The transaction is formally subject to the completion of the property transfer for the new industrial property, which is expected to take place before the end of the year. Duroc will maintain its majority ownership in Rail, which will continue to be included in the group's consolidated accounts. Rail had a turnover of approximately MSEK 150 in the financial year of 2022/2023 and employs approximately 50 people.

Stockholm, 7th of November 2023

For further information: John Häger, CEO Duroc - +46 702 48 72 99

The information in this pressrelease is such that Duroc AB is obliged to publish in accordance with EU's Market Abuse Regulation. The information herein was provided for publication at 08.20 (CET), 7th of November 2023 by the contact person named above.

Duroc AB (publ) Box 5277, SE-102 46 Stockholm, Sweden Street address: Linnégatan 18 Corporate ID number: 556446-4286

The Duroc Group manages and develops industrial and trading companies. With deep knowledge of technology and market, the Group's companies strive to achieve a leading position in their respective industries. As owner Duroc contributes actively to the development. Consolidated sales amount to approximately MSEK 2,800. The Group has approximately 800 employees. Duroc is listed on NASDAQ OMX Stockholm (symbol: DURC). www.duroc.se