GL&V's Board of Directors unanimously recommends to its shareholders that FLSmidth acquires the Division for CAD 983m (DKK 4.8bn) in cash on a net debt-free basis, corresponding to CAD 33 (DKK 162) per share on a fully diluted basis.
GL&V Process employs some 1,000 people and is expected to post a turnover of approx. CAD 523m (DKK 2.6bn) for the past financial year (1 April 2006 to 31 March 2007). GL&V Process is primarily comprised of the companies Dorr-Oliver Eimco and Krebs International which are world leaders in their respective fields.
The acquisition of GL&V Process enables FLSmidth to realise the global growth strategy for its Minerals activities. This is a strategy based on growing the Group's minerals business to the same magnitude and strength as the cement business. As a result of the acquisition the Group will therefore reduce its long-term exposure to cyclical market developments.
The FLSmidth Group's minerals activities are today marketed under the name of FFE Minerals. Going forward, the Minerals business will represent a substantially greater portion of the FLSmidth Group's overall activities, and the intention is to see increasing global integration between Cement and Minerals activities. Within this context it has been decided that the FLSmidth Group's overall Minerals business in the future will be marketed under the name of FLSmidth Minerals.
FFE Minerals and GL&V Process complement each other both geographically and product-wise, as has been demonstrated through several years of partnering in international projects.
FFE Minerals is an expert in pyro technologies and in crushing and grinding of minerals, whilst GL&V Process has specialised in the downstream separation processes. Together, their products represent one complete process technology from the extraction of minerals to the end product.
Similarly, the two companies complement each other on the commercial front.
FFE Minerals' main commercial focus is on selling individual machine units, whilst GL&V Process has an organisation that focuses on aftermarket sales and service. Geographically, the strengths of the two companies are well distributed across the globe. GL&V Process and FFE Minerals will together have a strong presence in all the relevant markets worldwide.
The joint operation, FLSmidth Minerals, will become a global market leader in crushers, mills, hydrocyclones, flotation, sedimentation, materials handling and calcination.
-Order backlog at 31 December 2006: CAD 329m (DKK 1,613m)
-Turnover 2005/06: CAD 378m (DKK 1,946m)
-EBIT result 2005/06: CAD 47m (DKK 244m) (normalised)
-EBIT ratio 2005/06: 12.5 percent
-Proforma turnover 2006/07*: CAD 523m (DKK 2,566m)
-Proforma EBIT ratio 2006/07*: 12 percent
(*2006/07 is FLSmidth's estimate on GL&V Process. Krebs proforma full year is included in 2006/07)
(GL&V fiscal year 2007 = 1 April 2006 - 31 March 2007)
-Order backlog at 31 December 2006: DKK 4,733m
-Turnover 2006: DKK 3,276m
-EBIT result 2006: DKK 258m
-EBIT ratio 2006: 7.9 percent
-Expected turnover 2007: DKK 5 - 5.5bn
-Expected EBIT ratio 2007: 9 percent
It is expected that the acquisition will lead to a number of sales and cost synergies. FLSmidth & Co. will announce its expectations in this respect when the acquisition has been completed.
After the acquisition of GL&V Process, all other things being equal, the FLSmidth & Co. A/S financial position will change from net interest-bearing receivables of DKK 2.8bn at 31 December 2006 to an interest-bearing net debt of approximately DKK 2.0bn. FLSmidth has received a binding offer for the credit facility needed to finance the acquisition.
Reference is also made to GL&V's press release issued today.
Please address any questions regarding this announcement to Mr Jørgen Huno Rasmussen, Group CEO, at tel. +45 30 93 15 79. There will also be an opportunity to ask questions regarding the announcement at the press and analysts meeting to be held Friday 20 April at 11.30 hours, see below.
FLSmidth & Co. A/S
Chairman of the Board of Directors
A press and analysts meeting will be held Friday 20 April at 11.30 hours at FLSmidth & Co. A/S's address, Vigerslev Alle 77, DK-2500 Valby.
The meeting can also be followed live as webcast via this link:
and as teleconference at tel. +45 70 26 50 40