ASSA ABLOY forms joint venture in North America with UDP
In North America, the same distribution channels are used for locks, security and safety related hardware and doors sold for non-residential applications. Distributors can provide contractors and end users with a comprehensive product package that fulfills all safety and security codes and needs for door openings. The ASSA ABLOY Group has supplied locks, key systems, safety and security hardware as well as security steel doors and frames and wood doors in North America since 1996 when ASSA ABLOY made a major commitment to the US market. The joint venture with UDP will allow ASSA ABLOY to better serve customers throughout North America with complementary products and through more efficiently utilizing the combined resources.
Over the years, CECO's door products and the door hardware products of the Yale Security Group have frequently been sold through the same distributors. Distributors have often combined the products of the two companies to benefit their customers. ASSA ABLOY acquired the Yale Security Group in 2000. As a result of the formation of this joint venture with UDP, ASSA ABLOY will offer through distributors the range of attractive CECO doors and Yale door hardware products.
In addition there are considerable manufacturing and purchasing synergies that can be achieved by the joint venture. For example, UDP has achieved manufacturing excellence and cost efficiency in its door production units, whereas ASSA ABLOY's Curries business is particularly strong in the production of door frames.
United Door Products (UDP)
UDP is one of the leading manufacturers of steel doors and frames for non-residential applications in the US and Canada with 1500 employees. The main operations are CECO, Dominion Building Products and Fleming with seven manufacturing facilities in the US, Canada and Mexico. Additionally, UDP has also a leading position in the detention segment through its Trussbilt unit, located in South Dakota.
Pro forma effects
UDI will receive USD 96 M in cash and 20 percent of the share in the newly formed debt free joint venture. ASSA ABLOY will have 80 percent ownership in the joint venture and has the right to buy the remaining share after two years according to an agreed earnings based formula. UDI has a corresponding put option after two years.
The formation of the joint venture will create only a minor goodwill element and will be earnings per share accretive from the start.
Sales of security doors has over many years shown a high degree of stability with only limited dependence of the general economy. ASSA ABLOY's business in North America including the security door products has shown good development during the first quarter 2001.
The formation of the joint venture is subject to regulatory approvals.
For further information, please contact
Carl-Henric Svanberg, President & CEO, tel: +46-8-506 485 52 or +46-8-510 0551,
The ASSA ABLOY Group is the world's leading manufacturer and supplier of locks and associated products,
dedicated to satisfying end-user needs for security, safety and convenience. Current sales for the Group are in excess of
SEK 20 billion (approximately USD 2 billion) and the number of employees is more than 20,000.
ASSA ABLOY is the global leader in door opening solutions and offers mecahnical and electromechanical locks, digital door locks, security doors, entrance automation, hotel security and secure identity solutions, primarily in identity and access management, as well as a number of other related products and services.
Since its formation in 1994, ASSA ABLOY has grown from a regional company into an international Group with some 47,000 employees operating in more than 70 countries and sales of around SEK 71 billion.