Componenta acquires De Globe
Componenta Corporation Stock Exchange Release 5.3.2004 at 9.30
Componenta acquires De Globe Componenta acquires 55% of the shares and votes of De Globe, a Dutch foundry company. Componenta also has an option to acquire the remaining De Globe shares by the end of 2007. Componenta and De Globe complement each other operationally very well and together they form a major European supplier of casting solutions. The combined net sales of the companies in 2003 are EUR 259 million. In the transaction the Dutch private equity fund NIB Capital is selling all of its shares, representing 50% of the shares in De Globe and Industriebank LIOF is selling 5% of the shares in De Globe, where after Industriebank LIOF will have a 45% shareholding in the company. Industriebank LIOF is a local private equity fund that invests mainly in companies located in the Dutch province of Limburg. The purchase price for the De Globe shares acquired by Componenta is EUR 3.6 million. De Globe comprises three iron foundries in the Netherlands, located in Belfeld, Hoensbroek and Weert. In 2003 the company had net sales of EUR 81 million and most of the sales came from Germany, Belgium, the Netherlands and France. De Globe's main products are complex cast components for the off-road industry, the heavy truck industry, and for compressors and pressure vessels. The company employs 640 people. The company's result after financial items was EUR -4.9 million last year, which includes EUR 3 million in one-time costs relating to the restructuring of production. At the end of 2003 De Globe had an equity ratio of 41% and total shareholders' equity of EUR 23 million. Net interest bearing debt amounted to EUR 12 million. In order to raise productivity at De Globe there is in progress a project, which will eventually close down the foundry in Belfeld and transfer production to Hoensbroek. This will result in annual cost savings of EUR 4 million as from 2005. The investments to be made in connection with the transfer of production will be about EUR 9 million. The costs for closing down and transferring operations will be altogether EUR 3 million, for which a provision has been made in the 2003 financial statements. To finance the project De Globe's main bank will provide financing of EUR 8 million and the owners, Componenta and Industriebank LIOF, will each provide preferred capital notes of EUR 2 million. De Globe and Componenta complement each other very well in terms of geographical distribution of sales and customer bases. Componenta's sales organization in the Nordic countries and De Globe's sales organization in central Europe will be combined into a strong European sales organization. Componenta's machine shops and machining expertise will support De Globe's operations and enable a broader service offering to customers. The sale of Thermia shares and the acquisition of De Globe are part of Componenta's strategy to divest non-core business and concentrate on developing the core business. Part of the EUR 16 million obtained from the sale of Thermia shares will be used to finance the acquisition of De Globe. The EUR 7.5 million profit on the sale of Thermia shares and the EUR 5 million profit to be recorded on the De Globe transaction will raise Componenta's equity ratio significantly. The De Globe transaction comes into effect immediately after the closing of the Thermia sale. Componenta is holding a press conference in Helsinki at 10.30 at the restaurant Papa Giovanni's Showroom, WTC Plaza, Keskuskatu 7, 00100 Helsinki. Live transmission of the conference over the Internet can be viewed at www.componenta.com. It is also possible to present questions to CEO and President Heikki Lehtonen there. Helsinki, 5 March 2004 COMPONENTA CORPORATION Heikki Lehtonen President and CEO FURTHER INFORMATION Heikki Lehtonen President and CEO Tel. +358 9 225 021 Kimmo Virtanen CFO tel. +358 9 225 021