Componenta acquires the majority of Döktas
Componenta Corporation Stock Exchange Release 19.10.2006 at 8.30
Componenta acquires the majority of Döktas Componenta has signed an agreement with Koc Group to acquire 55% of the shares and votes of Döktas Dökümcülük Sanayi ve Ticaret A.S., a Turkish listed iron and aluminium casting component manufacturer. Componenta and Döktas together will form the second largest independent European supplier of casting components and advanced solutions. The combined net sales of the companies in 2005 were EUR 552 million and the amount of personnel is approximately 5,000 (incl. indirect employees). In the transaction Koc Group and related parties are selling all their shares, representing 55% of the shares of Döktas. The rest 45% of Döktas shares and votes are publicly traded on the Istanbul Stock Exchange. Pursuant to applicable Turkish laws, Componenta intends to make a mandatory tender offer for the remaining Döktas shares, but aims to keep Döktas as a listed company. The equity value of the transaction amounts approximately to EUR 89 million (USD 111 million) including a 15% premium to the current market capitalization of Döktas (at 17.10.2006). Componenta intends to finance the acquisition with senior debt and a EUR 20 million convertible loan. Döktas is a leading metal casting company in Turkey with net sales of EUR 209 million in 2005. The company has two main business units manufacturing iron cast components in Orhangazi (70% of the net sales) and aluminium components in Manisa (30% of the net sales). Döktas is focused on customers in the heavy truck, offroad, machine building and car industry. The main export market for Döktas is Western Europe and the share of export sales amounted to 60% of the total net sales in 2005. The acquisition includes Sherbrook, a UK based sales company 100% owned by Döktas. Döktas employs some 2,500 people (incl. indirect employees). During the past few years Döktas has rapidly grown its net sales, boosted by several capacity and production increases. Its financial performance in 2006 has improved. In 2005 Döktas made an operating profit of EUR 5 million. The company's result after taxes in 2005 was EUR 4 million. The result after taxes in January - June 2006 was EUR 8 million (compared to EUR 3 million in the corresponding period in 2005). At the end of 2005 Döktas had an equity ratio of 63% and total shareholders' equity of EUR 103 million. Interest bearing debt amounted to EUR 30 million at the end of 2005. Prior to transaction Döktas sells its participations at the net value of EUR 20 million. The acquisition of Döktas will allow Componenta to provide customers with a wide product and solution range based on technologically advanced production. Synergies are expected from combining sales and distribution organizations, improved customer and geographical coverage with cross-selling opportunities, optimizing purchasing of raw materials and utilizing production capacity efficiently. Combining operations will lead to estimated EUR 10 million synergy benefits by 2008. The acquisition of Döktas follows Componenta's strategy to be market leader in advanced cast components in Europe by 2010. The pro forma combined net sales of Componenta and Döktas in 2005 were EUR 552 million and operating profit EUR 15 million. In January - June 2006 the pro forma combined net sales were EUR 312 million and operating profit EUR 23 million. During the corresponding period in 2005 the pro forma combined net sales were EUR 294 million and operating profit EUR 17 million. The transaction is expected to improve EPS of Componenta in 2007 and forward. The pro forma combined net sales by customer sector are estimated as follows: heavy trucks approximately 30%, off-road approximately 30%, machine building approximately 20%, power & transmission approximately 5% and automotive and light trucks approximately 15%. The pro forma combined net sales by market area are as follows: Nordic countries 32%, Germany 15%, Turkey 14%, Benelux 12%, UK 9%, Italy 6%, France 4%, other EU countries 2% and other countries 6%. The completion of the acquisition is subject to the approvals of German and Turkish competition authorities. The completion of the acquisition of 55% of Döktas is expected to occur by mid-December at the latest. Summa Corporate Finance from Helsinki and EVGIM from Istanbul acted as financial advisors to Componenta in the transaction. Componenta is holding a press conference in Helsinki on 19 October 2006 at 10.00 at Adams-sali, Erottajankatu 15 - 17, 00130 Helsinki. Live transmission of the conference over the Internet can be viewed at www.componenta.com. It is also possible to present questions to President and CEO Heikki Lehtonen there. Helsinki, 19 October 2006 COMPONENTA CORPORATION Heikki Lehtonen President and CEO Further information: Heikki Lehtonen President and CEO tel. +358 10 403 00 Marko Sipola Director, Business Development tel. +358 10 403 00