EXEL ESTABLISHES GLOBAL POSITION IN COMPOSITES - ACQUIRES PACIFIC COMPOSITES
EXEL OYJ STOCK EXCHANGE RELEASE 27.2.2006 9.20 EXEL ESTABLISHES GLOBAL POSITION IN COMPOSITES - ACQUIRES PACIFIC COMPOSITES - Exel becomes the world’s first global pultrusion company by acquiring Pacific Composites - Pacific Composites’ China operations accelerate Exel’s entrance in the Far East markets and enables production to start in China ahead of schedule - The profit contribution from Pacific Composites is expected to correspond to at least EUR 3 million a year, from the year 2007 and onwards Exel Oyj has today signed an agreement to acquire 100% of the shares of the Australia-based Pacific Composites Pty. Ltd. The transaction will be closed on 28 February 2006. Pacific Composites is a wholly owned subsidiary of Lemarne Corporation Limited, a publicly listed company on the Australian Stock Exchange. FACTS ON PACIFIC COMPOSITES Pacific Composites Pty. Ltd is mainly focused on pultrusion and is comprised of manufacturing operations in Melbourne and Brisbane in Australia, Runcorn and Clacton in the United Kingdom and Nanjing in China. It is the largest pultruder in Australia, the Pacific and the UK. It employs some 150 persons worldwide. Net sales during July 2004 - June 2005 were EUR 19.8 million and the profit before taxes EUR 1.8 million. Net sales during July - December 2005 were EUR 12.0 million, an increase of 25 per cent compared to the corresponding period last year. The profit before taxes for the same period amounted to EUR 1.4 million. For further information on Pacific Composites, please visit www.pacomp.com.au. EFFECTS ON EXEL Through the acquisition of Pacific Composites, Exel establishes itself as the world’s first global pultrusion company. The acquisition will extend the product range and reinforce Exel’s leading positions in the Pacific Rim/Far East. The investment project of building up our own factory in Shenzhen, China, is postponed for the time being, as Pacific Composites has new production facilities in Nanjing, China. The acquisition enables Exel to start production in China ahead of the planned schedules. The cash consideration for Pacific Composites’ shares amounts to EUR 17.5 million (AUD 28 million). In addition, pursuant to the authorization by the AGM on 14 April 2005, Exel’s share capital will be increased by a new share issue to Lemarne Corporation Limited of 230,743 shares, with an estimated market value of EUR 2.8 million (AUD 4.5 million). Synergies of the acquisition are expected to be realized in the areas of procurement, sales and marketing. Pacific Composites’ contribution to Exel Group EBIT is expected to amount to at least EUR 3 million a year, from the year 2007 and onwards. In 2006, Pacific Composites will be consolidated in Exel Group accounts from 1 March 2006. “This acquisition is a major strategic step to strengthen Exel’s Industry Division in the growing Asian markets and to improve our service ability to service our international customers. We are very pleased to have the Pacific Composites’ skilled and experienced personnel join our Group to develop our operations further on a global basis”, Mr. Ari Jokelainen, President & CEO of Exel, says. Commenting on the sale, Lemarne’s Chairman, Brian Noxon said “Pacific Composites has an excellent new home which should enhance its future growth prospects. In short we believe it is an unusually good fit which should also assist Exel expand its product range and better service its international customers.” INCREASE OF EXEL SHARE CAPITAL Exel Oyj Board of Directors has decided pursuant to the authorization given by the Annual General Meeting on 14 April 2005 to increase the company´s share capital from EUR 2,082,582 to EUR 2,124,115,74 as follows: - In the new issue 230,743 shares with an accounting equivalent value of 0.18 per share will be issued, - The new shares shall be offered to Lemarne Corporation Limited under Chapter 4, Section 2 of the Companies Act subscribed in deviation from the shareholders´ pre-emptive right. The entity entitled to subscribe the shares is not part of the inner circle of Exel Oyj. - The new shares are used as a part of the payment of the share purchase price defined above and thus there is a weighty reason to deviate from the shareholders´ pre-emptive right subscription right. - The subscription is made in connection with the completion of the Share Sale Agreement concerning the acquisition of Pacific Composites Pty. Ltd. The agreed date is 28 February 2006. - The issue price is EUR 12.06 per share. The amount of the issue price exceeding the accounting equivalent value is entered to the premium fund. - The shares subscribed pursuant to decision will entitle their holders to dividend and other shareholders´ rights as of the date when the corresponding increase in the share capital has been registered in the Trade Register. PRESS CONFERENCE Exel will hold a press conference regarding the acquisition of Pacific Composites today 27 February 2006 for the media and analysts at 11.00am in the Pavilion Cabinet of the Scandic Hotel Simonkenttä at Simonkatu 9, Helsinki, Finland. Contrary to what has been published before, Exel will publish its financial statements already today 27 February 2006 at 9.20am, as the statements have been completed. Both the acquisition and the financial statements will be handled in the press conference. Mäntyharju, 27 February 2006 EXEL OYJ Ari Jokelainen President Further information: Mr Ari Jokelainen, President, Exel Oyj, tel. +358 50 590 6750 www.exel.net Exel Oyj is a leading, international Group specialised in composite technology, with a special focus on pultrusion, pull-winding and continuous lamination. The Group’s operations include design, manufacturing and marketing of advanced composite products for industrial applications and consumer goods. Exel’s most well-known consumer products include cross-country, alpine and Nordic Walking poles, antenna radomes and other industrial applications. In 2005 the Group’s net sales totalled EUR 91 million. Exel personnel averaged 450. Exel’s share is listed on Helsinki Stock Exchange’s Main List.