Componenta to acquire Komas Oy and become the leading metal component manufacturer in Finland

Componenta Corporation Stock Exchange Release, Insider Information, 16 May 2019 at 8.00

Componenta Corporation (“Componenta”) has signed an agreement on purchasing the shares and capital loans of Komas Oy (“Komas”), a machining operation company, from funds managed by CapMan, Fortaco Oy and certain private persons. Komas is a manufacturer of machined components, forged blanks, hydraulic pipes and plate cuttings. In 2018, Komas had net sales EUR 44.9 million according to Finnish Accounting Standards (FAS) and EBITDA of EUR 2.0 million (FAS). At the end of 2018, the company employed 313 people in Jyväskylä, Härmä, Kurikka, Leppävesi and Sastamala. Key customers of Komas include major international OEMs of machinery and equipment. According to the arrangement, the entire purchase price is paid with the shares of the Componenta Corporation.

Componenta CEO Harri Suutari:

“The acquisition of Komas expands Componenta’s range of products and services and improves the quality of our customer service by creating a one-stop-shop for industries purchasing cast and machined components. A large number of our customers wish to purchase the casting and the related services as a ready-made component from a single supplier. Componenta and Komas already have several common customers with ideal prerequisites for cooperation. The acquisition of Komas will improve the level of expertise within the Group and expand our presence in the Finnish market. Long distances between locations increase the total cost of a product. By acquiring machining locations close to our foundries, we are able to increase our competitiveness.

We have focused heavily on increasing profitability and carrying out measures defined in the restructuring programme in recent years. We are determined to continue this work while improving our customer service and establishing the foundation for the profitable growth of Componenta.”

CapMan partner Jan Mattlin:

”Komas has significantly grown and developed during CapMan’s ownership and has established a good position among its customers. In particular, we have focused on measures that improve quality, delivery accuracy and operational efficiency. Companies of sufficient scale and with professional management that are able to offer added value to clients will, in my opinion, continue to succeed in this industry. I see the acquisition as a good solution for Komas and the combination with Componenta is a logical next step for the development of the operations. I want to especially thank Komas’ management for their dedication over these past years. Our journey continues as shareholders of Componenta.”

Purchase price

The purchase price of Komas consists of 60 million new shares issued by Componenta, which is approximately 25.3% of issued Componenta Corporation shares after the share issue or 24.3%, if all rights and privileges attached to shares are considered. The purchase price is EUR 6.6 million if the closing price of Componenta’s share on 15 May 2019, EUR 0.11, is used as share price. The final purchase price is determined in accordance with the share price on the closing date.

Componenta is planning to issue shares for the sellers of Komas as a form of paying the purchase price. For this purpose, the company will convene an Extraordinary General Meeting in order to authorise the Board of Directors to decide on the share issue. Prospectus including pro forma information on the impacts of the transaction is prepared for the listing of new shares. The majority owners of Komas, i.e. the funds managed by CapMan and CapMan’s portfolio company Fortaco Oy (“Majority Owners”) have in the share purchase agreement undertaken not to exercise voting rights attaching their prospective shares until the shareholding of the Majority Owners has decreased below 10%. In accordance with the restriction the Majority Owners will abstain from exercising the voting rights in the general meetings of Componenta to the extent that the voting rights represent 50% or more of the votes represented in the general meeting concerned.

Financial performance and situation of Komas Oy

The income statement and balance sheet of Komas Oy are displayed below in accordance with the Finnish Accounting Standards (FAS).

INCOME STATEMENT
TEUR 1 January–
1 January–
31 December 2018 31 December 2017
Net sales 44,880 41,856
Changes in inventories of finished goods and work in progress 342 292
Other operating income 339 175
Materials and services -22,468 -21,135
Personnel expenses total -14,644 -13,935
Depreciation, amortisation and write-down of non-current assets total -2,147 -2,008
Other costs of operations -6,442 -6,196
Operating result -140 -952
Financial income and expenses total -753 -369
Operating result before appropriations and taxes -892 -1,320
Net profit -892 -1,320
BALANCE SHEET
TEUR 31 December 2018
EUR
31 December 2017
EUR
Assets
Non-current assets
Intangible assets total 926 641
Tangible assets total 6,834 7,526
Non-current assets total 7,760 8,167
Current assets
Inventories total 4,659 4,396
Short-term receivables 1,053 1,431
Cash and cash equivalents 31 816
Current assets total 5,743 6,642
Assets total 13,503   14,809
TEUR 31 December 2018
EUR
31 December 2017
EUR
Liabilities and shareholders’ equity
Shareholders’ equity
Share capital 3 3
Other equity -8,560 -7,668
Total shareholders’ equity -8,558 -7,666
Liabilities
Capital loans 11,586 11,605
Other non-current liabilities 2,569 1,900
Total non-current liabilities 14,155 13,505
Total current liabilities 7,906 8,970
Liabilities 22,061 22,475
Total liabilities and shareholder’s equity 13,503 14,809

The capital loans presented in Komas’ balance sheet are granted by the company’s current owners. Componenta shall acquire these capital loans as part of the acquisition. Componenta is planning to convert these capital loans into the equity of Komas after the acquisition.

Closing of the transaction and its impact on Componenta

The closing of the transaction depends on the usual terms of business acquisitions, including any possible approvals from authorities and the decision on the share issue by the Extraordinary General Meeting. It is the intention of the parties to conclude the transaction on 1 July 2019 and to consolidate Komas and Componenta on the date of closing the transaction. Componenta will release a separate announcement regarding the closing of the transaction.

The transaction is estimated to increase Componenta’s net sales by approximately EUR 20 million in 2019, provided that the closing of the transaction on 1 July 2019. The transaction is also estimated to have a positive impact on Componenta’s EBITDA.

COMPONENTA CORPORATION

Harri Suutari
President and CEO

For further information, please contact:

Harri Suutari
President and CEO
tel. +358 10 403 2200

Marko Karppinen
CFO
tel. +358 10 403 2101

Componenta is an international technology company. Componenta specializes in supplying cast and machined components to its global customers, who are manufacturers of vehicles, machines and equipment. The company’s share is listed on Nasdaq Helsinki.

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