RAMIRENT AND CRAMO FORM A JOINT VENTURE FOR THEIR RUSSIAN AND UKRAINIAN BUSINESSES
RAMIRENT AND CRAMO FORM A JOINT VENTURE FOR THEIR RUSSIAN AND UKRAINIAN
Ramirent Plc, Press Release, 31 October 2012, at 9:00 am (EET)
Vantaa, Finland, 2012-10-31 08:00 CET (GLOBE NEWSWIRE) --
-- The new joint venture will be a leading equipment rental services company
in the Russian and Ukrainian markets
-- The joint venture will be a service company specialising in equipment
rental services, as well as rental of modular space
-- The combined operations will comprise Cramo’s Russian operations (excluding
Kaliningrad) and Ramirent’s Russian and Ukrainian operations
-- Ramirent will own 50 percent and Cramo 50 percent of the joint venture. The
parties have a strong mutual interest and commitment to develop the
-- The parties intend to create a financially and operationally strong player
to capture the growth opportunities in the region
-- The joint venture will operate under its own brand on a fully stand-alone
-- The closing of the transaction is subject to approval of competition
authorities, which are expected in January 2013
Ramirent and Cramo have signed a contract to form a joint venture combining
Ramirent’s business in Russia and Ukraine and Cramo’s business in Russia,
excluding operations in the Kaliningrad region, which will continue as part of
Cramo’s Lithuanian operations. Ramirent’s Russian and Ukrainian businesses are
currently a part of the Europe East segment.
The joint venture will be a leading rental services company in the Russian and
Ukrainian markets. It is estimated that in 2012 the consolidated combined net
sales of the joint venture amounts to approximately EUR 52 million and an
EBITDA margin of circa 35%. The combined entity has approximately 400 employees
and 22 own rental depots.
By establishing this joint venture, Cramo and Ramirent will combine their
complementary depot networks, resources and expertise in the Russian and
Ukrainian rental markets. The rationale for the transaction is to enhance
shareholder value by creating a strong player which will have increased
financial resources and organisational capabilities to capture the growth
opportunities in the Russian and Ukrainian markets.
“The Russian and Ukrainian markets offer significant growth potential for
equipment rental and through the joint venture we have a strong foundation to
invest for accelerated growth. Combining our efforts, we will be able to
present a compelling value proposition for both new and current customers, to
further develop the rental industry as a whole in these markets”, says Mr
Magnus Rosén, President and CEO of Ramirent Plc.
“For a few years it has been evident that Russia and Ukraine are in the early
phase of developing a modern rental industry. The construction market is huge
and the momentum is significant. Taking the lead in the rental industry offers
interesting opportunities, but also big challenges. The combined resources of
our already successful businesses give us a clear head start and a unique
platform for a long-term commitment in Europe’s most interesting region”, says
Mr Vesa Koivula, President and CEO of Cramo Plc.
Cramo’s Russian business, which will be in the scope of the transaction,
consists of 9 outlets. The net sales of the business in 2012 is estimated at
EUR 19 million.
Ramirent’s business in Russia and Ukraine consist of 13 own outlets, 7 in
Russia and 6 in Ukraine. Additional 6 outlets are operated in Ukraine with
shop-in-shop partners. The net sales of the business in 2012 is estimated at
EUR 33 million.
The joint venture will be created under a newly-established Finnish limited
liability company to which Ramirent and Cramo contribute their respective
Russian and Ukrainian subsidiaries’ shares as contributions in kind. The joint
venture will be owned and controlled jointly by Ramirent (50 percent) and Cramo
(50 percent). To reach equal ownership in the joint venture, Cramo will (due to
its smaller size) pay to Ramirent a cash contribution of approximately EUR 9.2
million at the time of the closing of the transaction.
Mr Anton Artemiev will be elected as Chairman of the Board. Mr Artemiev has
extensive Russian and international business experience, including top
management positions with Carlsberg Group in Russia. Other professional board
members will be appointed at later stage to complement the board.
The ownership in the joint venture will be accounted for in Ramirent’s
consolidated financial statements using the equity method. The share of the
profit of the joint venture will be booked in the consolidated Group profit and
loss statement above EBITDA using the one line method. The profit will be
reported in the Europe East segment.
The transaction will not affect the revenue or result of Ramirent for 2012. The
transaction will result in a non-recurring tax-free capital gain of
approximately EUR 12.3 million to Ramirent Group. The final capital gain will
be recorded at closing of the transaction, which is estimated to take place in
January 2013. The closing is subject to approval by the relevant competition
Vantaa, 31 October 2012 RAMIRENT PLC
President and CEO
Magnus Rosén, President and CEO, tel. +358 20 750 2845,
Jonas Söderkvist, Chief Financial Officer, tel. +358 20 750 3248,
NASDAQ OMX Helsinki Ltd
The main media
Ramirent is a leading equipment rental group delivering Dynamic Rental
Solutions™ that simplify business. We serve a broad range of customers,
including construction and process industries, shipyards, the public sector and
households. In 2011, the Group’s net sales totalled EUR 650 million. The Group
has 3,100 employees at 379 rental outlets in 13 countries in the Nordic
countries and in Central and Eastern Europe. Ramirent is listed on the NASDAQ
OMX Helsinki Ltd.