AssiDomän to sell Corrugated & Containerboard to Kappa Holdings

AssiDomän to sell Corrugated & Containerboard to Kappa Holdings AssiDomän AB has concluded an agreement with Kappa Alpha Holdings ("Kappa Holdings") on the sale of AssiDomän Corrugated & Containerboard. Kappa Holdings is a company formed by Cinven Ltd and CVC Capital Partners to acquire AssiDomän Corrugated & Containerboard, which will be integrated in due course with Kappa Packaging. The selling price for AssiDomän Corrugated & Containerboard amounts to MSEK 10,410 on a debt-free basis. Of this MSEK 350 represent tax debts, and MSEK 4,680 net interest-bearing liabilities. In 2000 the business units Corrugated and Containerboard had net revenues of MSEK 12,474 and operating income (EBIT) of MSEK 1,061. Formal take-over of the business is as of January 1, 2001. The transaction requires the approval of EU:s competition authorities. The process to obtain approval has been opened and is estimated to be completed with payment during the first six months of this year. Interest on payment for the shares will be paid from January 1, 2001. For AssiDomän the transaction is expected to yield a capital gain of MSEK 1,570. In addition thereto, there are positive tax effects of approximately MSEK 300. Overall, the sale is expected to generate a positive effect on the profit for 2001 of about MSEK 1,870, equivalent to SEK 19.70 per share (95.2 million shares after on-going redemption). After the transaction, proforma net cash position will be MSEK 9,400, and after accomplished redemption MSEK 5,000. - The sale is in line with the strategy adopted more than a year ago, that is to create long-term competitive structures for the business at the same time as we are making visible and creating shareholder-value, says Gunnar Palme, CEO of AssiDomän. Combined, AssiDomän's and Kappa's operations will be a considerably stronger player in the European market for corrugated and containerboard. - The rationale behind today's announcement is simple: Kappa Packaging and AssiDomän Corrugated & Containerboard are extremely complementary with minimal geographical overlap. The businesses will have a strong balanced portfolio of virgin and recycled fibre products, says Frits Beurskens, President of Kappa Packaging. Capital structure By selling Corrugated & Containerboard, AssiDomän becomes a company focused on owning forestland. The capital structure will therefore be adjusted to AssiDomän's re-focusing of its business. Further information as to AssiDomän's future capital structure and the form of transferring capital to the shareholders will be provided after completion of the transaction. Future direction of the business AssiDomän is the largest publicly owned owner of forestland in Europe with a unique asset in 2.4 million hectares of productive forestland in Sweden. The sale of Corrugated & Containerboard is a crucial step in the transforming of AssiDomän into a focused forest-owning company. After the transaction, AssiDomän's industrial operations will consist of the Frövi cartonboard mill, the sawmill operation, and a 50-percent stake in Billerud AB. The intention is to obtain a listing of Billerud AB on the Stockholm Stock Exchange as soon as possible, but not later than during 2002. In connection with such listing, AssiDomän's shareholding in Billerud would be distributed to its shareholders. The process to develop stronger structures for the remaining industrial operations will continue. Given the dominating position of forest assets in AssiDomän after the sale, the potential positive effects of a possible separation between forestry and industrial operations are seen as minor. AssiDomän's Board of Directors has therefore decided not to present to the AGM the previously announced proposal for a split of forestry and industrial operations in two separate companies. Given its new future orientation towards forest ownership, AssiDomän will have the capacity to generate a strong and stable cash flow. Earnings fluctuations are considerably smaller for forest than for industrial operations and forest ownership does not require ongoing capital expenditures. Historically, forest ownership has been a low-risk investment with a good return. A stable cash flow and a limited need for capital expenditures allows for adoption of a dividend policy with a high payment ratio. In the same way as before, the Company also has the option of strengthening its cash flow by land transactions from time to time. Advisor to AssiDomän in the sale of Corrugated & Containerboard has been Carnegie. AssiDomän AB Corporate Communications 12 March 2001 For further information: Gunnar Palme, president and CEO AssiDomän, Tel.: +46 8 655 9281 Berit Hallberg, SVP Corp. Communications, Tel.: +46 8 655 9106, +46 70 522 0860 Peter Månsson, VP Investor Relations, Tel.: +46 8 655 9278, +46 70 659 9278 Press conference: Held Monday 12 March 2001, at 10.30 a.m. (CET), Salénhuset, Norrlandsgatan 15, Stockholm. Conference room: Forum. Participation from Gunnar Palme President, CEO AssiDomän, Bernt Magnusson Chairman AssiDomän and Ed Driessen Vice President, deputy CEO Kappa Packaging. International teleconference: Held Monday 12 March 2001, at 1.30 p.m. (CET). Call +44 (0)20 8240 8244 (if calling from Europe) or +1 303 267 1000 (if calling from the US). You should use a quiet room please. Instant replay (available 48 hours): Europe: +44 (0)20 8288 4459, access code: 614392 US: +1 303 804 1855, access code: 966405 Further press-materials will be available from 10.30 a.m. (CET) at AssiDomäns website: www.asdo.se. Enclosures:1. AssiDomän 2000 proforma income statement, balance sheet, and key figures after the sale 2. Facts on the businesses 3. Company backgrounds Appendix 1 PROFORMA - AssiDomän group excl. units under sale Profit and loss account Proforma Full year MSEK 2000 2000 Net turnover 7,182 24,643 Other operating income 331 566 Operating costs* -6,128 -20,113 Share of profits of 810 -4 associated companies Depreciation according to -404 -1,619 plan Operating profit 1,791 3,473 Financial items -206 -383 Profit after financial 1,585 3,090 items Taxes -444 -266 Minority interests - -6 Net profit 1,141 2,818 * Of which SPP-funds are included with MSEK 144 and 332 respectively, in staff costs. Balance sheet Proforma Dec 31 Dec 31 MSEK 2000 2000 Fixed assets, non-interest- 22,210 30,069 bearing Stocks 718 2,305 Current receivables, non- 2,223 4,910 interest-bearing Liquid assets and interest- 16,774 2,925 bearing receivables Total assets 41,925 40,209 Shareholders' equity 26,713 24,843 Minority interests - 29 Non-interest-bearing 7,843 10,235 liabilities and provisions Interest-bearing 7,369 5,102 liabilities and provisions Total shareholders´ equity 41,925 40,209 and liabilities Proforma Dec 31 Dec 31 Key data per share 2000 2000 Number of shares 118,373,0 118,373,0 34 34 Earnings per share, SEK 9.65 23.81 Shareholders´ equity, SEK 226 210 Net debt, MSEK -9,405 2,177 Net debt ratio -0.35 0.09 Return on equity, % - excl write-up 2000 7 20 The above profit- and loss account and balace sheet are based on the following assumptions: · Corrugated & Containerboard is deconsolidated in the group accounting. Units sold to Frantschach during 2000 are not included. · Estimated net result from the sale of Corrugated & Containerboard (MSEK 1 870) is not included in the profit and loss account. The sum does not include the effect of translation differences on equity of the units during holding period. · No adjustment has been made to net financial items, apart from elimination of the above-named units' net financial items. No interest on the purchase price is included. · The tax charge has been calculated based on an average tax rate of 28%. · In the balance sheet are included as equity; estimated capital gain (MSEK 1 570) and positive tax effects (MSEK 300) from the sale. · The balance sheet per 31 December, 2000 has been adjusted for the effects from the foundation of Billerud. The units AssiDomän Skärblacka and AssiDomän Karlsborg are deconsolidated and instead entered into the accounts as share of profits of associated companies. Appendix 2 The integrated company Yearly net turnover approx. MEUR 3,000 EBITDA MEUR 480 Number of employees: 17,400 A total of 120 manufacturing units in 17 countries Production capacity: kraftliner 640,000 tonnes recycled material 1 400,000 tonnes SC fluting 150,000 tonnes solid board 1 000,000 tonnes corrugated board 4,000 million m2 Market position in Europe containerboard; 11% Market position in Europe corrugated; 12% Sold units; AssiDomän Corrugated & Containerboard Net turnover year 2000, MSEK 12,474 Number of employees approx. 9,000 containerboard capacity; 1.1 million tonnes corrugated board capacity; 2.2 billion m2 Production facilities: AssiDomän Kraftliner, SE Kraftliner 640,000 tonnes AssiDomän Ania, IT Testliner/waste based 180,000 fluting tonnes AssiDomän Stúrovo, SK Testliner/waste based 170,000 fluting tonnes AssiDomän Lecorsonnois, Testliner/waste based 75,000 FR fluting tonnes 34 corrugated plants 25 sheet plants 7 specialist plants Located in 16 countries; Sweden, Finland, Denmark, United Kingdom, Czech Republic, Poland, Russia, Lithuania, Slovakia, Germany, Belgium, the Netherlands, France, Switzerland, Italy, Spain. Appendix 3 Kappa Packaging Kappa Packaging is one of Europe's largest innovative companies operating in the production, development and sale of recycled paper, solid board, corrugated and solid-board packagings, graphic and speciality board. With a workforce numbering around 8,200, Kappa Packaging sales are approximately EUR 1.7 billion. With 54 operating companies spread over 12 countries - including the Benelux, Germany, the United Kingdom, France, Norway, Poland and the Czech Republic - the company holds leading market positions. Kappa Packaging focuses its products primarily on the business- to-business segment of the packaging market. For further information please see the company website: www.kappapackaging.com. AssiDomän AssiDomän manufactures and markets corrugated boards, raw material for corrugated, cartonboard and sawn timber. The group is Europe's largest listed forest-owning company with 2.4 million hectares of productive forestland. AssiDomän has approximately 11,000 employees in 18 countries. In 2000 turnover amounted to SEK 24.6 billion. AssiDomän's main market is Europe. More than 80% of sales take place out- side Sweden. Basic production; forestry and the manufacture of packaging paper, is located primarily in Sweden, as well as in paper mills in Italy, France and Slovakia. Conversion into packaging is carried out at some 60 units in 16 European countries. AssiDomän is among the market leaders in most of the product areas in which the group operates For further information please see the company website: www.asdo.se. Cinven Cinven is the leading private equity provider for larger European buyouts, having led transactions in excess of £10 billion since 1995. The firm's strategy is focused on being the lead investor in large European management buyouts, typically with a transaction size of at least £100 million. Its objective is to invest in profitable businesses with established, market leading positions, and with strong prospects for growth through further investment and focused management. Cinven has undertaken private equity investment throughout the 1990s for three of the UK's largest pension funds: British Coal Pension Funds, Railways Pension Schemes and Barclays Bank Pension Fund. These have now been joined by a group of fifty world-wide institutional investors in the £1.5 billion Second Cinven Fund. This financial firepower enables Cinven to undertake some of Europe's largest buyout transactions in Europe. Wholly owned by its directors, Cinven is a totally independent business. For further information, please see the company website: www.cinven.com. CVC Capital Partners CVC is a leading independent equity provider in the UK and Continental Europe, specialising in large scale MBOs/MBIs. In 1998, CVC arranged European deals worth more than any other private equity provider, building on its previous seven year record for completing the largest number of major MBOs/MBIs in Continental Europe (source: KPMG Corporate Finance). Founded in 1981 as Citicorp's European private equity arm, in 1993 CVC carried out its own management buy-out and is independently owned by its management. CVC has offices in 11 European countries and 50 investment professionals. CVC currently has total funds under management of E4.1 billion, and more recently launched a $3.5 billion European fund. CVC is an investment adviser to Citigroup for its European private equity investments. Including funds from Citigroup, a US bank holding company Citigroup invests through Citicorp Capital Investors Europe Limited, its indirect subsidiary For further information, please see the company website: www.cvceurope.com. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/03/12/20010312BIT00060/bit0001.doc http://www.bit.se/bitonline/2001/03/12/20010312BIT00060/bit0001.pdf