Exel Composites expands into the American market through the acquisition of Diversified Structural Composites

EXEL COMPOSITES PLC                 STOCK EXCHANGE RELEASE       23 April 2018 at 16:25 EET

Exel Composites Plc has signed an agreement to acquire 100% of the shares in Diversified Structural Composites, Inc. (“DSC”), a composites company based in the United States of America, from Teijin Carbon America, Inc. a subsidiary of Teijin, a global carbon fiber manufacturer.

DSC has one manufacturing facility using mainly pultrusion technology located in Erlanger, Kentucky. DSC has a high level of technological know-how in pultrusion related technologies, which complements well Exel Composites’ existing expertise and growth strategy. DSC’s product portfolio consists of carbon fiber and glass fiber reinforced composites that are produced particularly for the wind energy industry. DSC has about 90 employees and for the fiscal year 2017, ended in March 2018, revenue amounted to USD 19 million and operating loss close to USD one million. Restructuring initiatives since 2015 have progressively improved DSC’s profitability and breakeven profitability is expected to be reached in 2019.

“We are decisively continuing the implementation of Exel Composites’ growth strategy and the DSC acquisition is a significant step in creating a true global footprint. The American market is the second largest composites market globally in terms of value and growth, right after the Asian market. With a well-established position in Europe and a strengthened presence in Asia since the Nanjing Jianhui acquisition in 2017, the Americas was the missing pillar in our pursuit for true global presence,” says Riku Kytömäki, President and CEO of Exel Composites. “DSC is a very good strategic fit for Exel Composites. It is focused on the same high growth segments, particularly wind energy and transportation, and opens up new channels to local markets enabling deliveries from the region to the region. The combined product portfolios of Exel Composites and DSC will enhance our attractiveness and provide cross-selling opportunities to existing and new customers. We appreciate DSC’s technological advantages in several key areas. We see that the technological expertise together with other complementary strengths will improve our joint competitiveness and enable synergies, among other, via technology transfers and supply chain optimization for the ultimate benefit of our customers,” he continues.

The acquisition of DSC will make Exel Composites the only pultrusion company with significant presence on all three major continents. This way Exel Composites aims to improve its global supply position to the markets. Rob Klawonn, President of Teijin Carbon America, comments the acquisition and says “As DSC now becomes part of the Exel Composites Group, Exel’s enhanced global footprint and Teijin’s growth plans as an automotive composites solution provider can lead into mutual cooperation. I look forward to exploring synergies between Exel and Teijin in various areas such as the transportation sectors.”

The total estimated net debt free purchase price is approximately USD 10 million, out of which USD 6 million corresponds to DSC’s business and USD 4 million to working capital. The transaction is expected to be closed during May 2018. The acquisition will be financed with a new long term loan.

Vantaa, 23 April 2018                   

Exel Composites Plc

Riku Kytömäki
President and CEO

For further information, please contact:

Riku Kytömäki, President and CEO
tel. +358 50 511 8288
riku.kytomaki@exelcomposites.com

Mikko Kettunen, CFO
tel. +358 50 347 7462
mikko.kettunen@exelcomposites.com

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www.exelcomposites.com

Exel Composites in brief

Exel Composites (www.exelcomposites.com) is a leading composite technology company that designs, manufactures and markets composite products and solutions for demanding applications. Exel Composites provides superior customer experience through continuous innovation, world-class operations and long-term partnerships.

The core of the operations is based on own, internally developed composite technology, product range based on it and strong market position in selected segments with a strong quality and brand image. Profitable growth is pursued by a relentless search for new applications and development in co-operation with customers. The employees' expertise and high level of technology play a major role in Exel Composites’ operations. Exel Composites Plc share is listed in Nasdaq Helsinki Ltd.

About Us

Exel Composites is the world’s leading composite technology company that engineers and manufactures composite products and solutions to an extensive range of demanding industrial applications. The core of the business is based on the employees’ high level of expertise and own, internally developed composite technologies, which have been perfected over decades with a steady focus on innovation. With nine manufacturing plants across Europe, Asia, and North America, and a global sales network, Exel Composites is firmly driven by superior customer experience and world-class operations. Headquartered in Finland, Exel Composites employs approximately 650 people globally. The company’s shares are listed on the Nasdaq Helsinki exchange. www.exelcomposites.com

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