Ahlstrom to demerge its Label and Processing business
August 30, 2012 - Finland
Ahlstrom Corporation has signed an agreement with EQT, the principal owner of Munksjö AB, to combine its Label and Processing business area with Munksjö AB to form a global leader in specialty papers through two partial demergers: one consisting of the Label and Processing operations in Europe (LP Europe) and one in Brazil (Coated Specialties).
The new company will be called Munksjö Corporation (in Finnish Munksjö Oyj) and its shares will be listed on NASDAQ OMX Helsinki. The transaction enables Ahlstrom to focus exclusively on its value-added business areas: Building and Energy, Filtration and Food and Medical. Meanwhile, the Label and Processing business area can be further developed together with Munksjö.
"During the past three years, Ahlstrom has systematically executed its strategy towards becoming a focused high performance materials company. This transaction of combining the Label and Processing business area with Munksjö is the most significant step in our strategy execution. It allows us to concentrate our resources to the areas where we see the most attractive value-add and growth opportunities," says Jan Lång, President and CEO of Ahlstrom.
"The essence of our strategy is that our high performance materials protect people, purify air and liquids and provide surface and structure to our customers' products. In addition to reinforcing our global leadership in Filtration, we seek growth opportunities in high performance materials for building, food packaging and medical applications," Lång continues.
"We expect this transaction to enhance value for Ahlstrom's shareholders through ownership in two focused publicly listed companies that are global leaders in their respective fields," concludes Lång.
The other major step in the process of Ahlstrom focusing its business operations was the divestment of the Home and Personal business area to Suominen Corporation in 2011. Ahlstrom expects the future growth to be realized through organic growth as well as acquisitions and partnerships in the three business areas.
The planned transaction will be executed through two partial demergers. In the first phase, Ahlstrom and EQT, the principal owner of Munksjö AB, will establish a new company to be named Munksjö Corporation (in Finnish Munksjö Oyj) to acquire the operations of Munksjö AB in exchange for new shares in Munksjö Corporation. The European operations of Ahlstrom's Label and Processing business area are then separated through a partial demerger and transferred into Munksjö Corporation in exchange for shares in Munksjö Corporation to be distributed to Ahlstrom's shareholders.
Prior to the public listing of the new company, new shares in Munksjö Corporation worth approximately EUR 100 million will be offered in a directed share issue to selected institutional investors, including Ahlstrom, Varma, Ilmarinen and EQT, to strengthen the capital structure of the new company. The investors are fully committed to subscribe for the shares in the directed issue. The first phase is expected to be completed during the first quarter of 2013.
In the second phase, following the public listing of the new company, Coated Specialties, the Brazilian part of Ahlstrom's Label and Processing business area, will be separated through another partial demerger into Munksjö Corporation. This is to allow enough time for receiving all the necessary regulatory approvals in Brazil. These approvals are not a prerequisite for completing the first phase and the public listing of Munksjö Corporation. The second phase is expected to be completed by the end of the second quarter of 2013.
In 2011, the Label and Processing business (the combined LP Europe and Coated Specialties) had net sales of EUR 681 million[1] and an EBITDA (excluding non-recurring items) margin of 5.11] percent. The business area employs approximately 1,500 people and has six plants in Europe and South America. Its main products include release liners, self-adhesive labels, base paper for metalized labels, flexible packaging papers, poster papers, decor papers, and abrasive backings. The plants that will be part of the transaction include Osnabrück in Germany; La Gere, Rottersac and Stenay in France, the Label and Processing operations in Turin, Italy, as well as the Coated Specialties plant in Jacarei, Brazil.
Munksjö AB is a Swedish specialty papers company currently with the privaate equity firm EQT as its main owner. The net sales of Munksjö on a pro forma basis totaled approximately EUR 645 million[2] in 2011, and its EBITDA on a pro forma basis (excluding non-recurring items) margin was 7.6[2] percent. The company employs about 1,800 people and has ten plants in Europe and Asia. Its main products include decor papers, abrasive backings, electrotechnical papers, and long-fiber specialty pulp.
Jan Åström, President & CEO of Munksjö AB, will become the President & CEO of the new company. The parties have agreed that the Chairman of the intermediate Board of Directors of Munksjö Corporation will be appointed by Ahlstrom. Peter Seligson has been appointed as an intermediate Chairman of Munksjö Corporation. The head office of Munksjö Corporation will be located in Stockholm, and its shares will be listed on the NASDAQ OMX Helsinki.
The new company will be called Munksjö Corporation (in Finnish Munksjö Oyj) and its shares will be listed on NASDAQ OMX Helsinki. The transaction enables Ahlstrom to focus exclusively on its value-added business areas: Building and Energy, Filtration and Food and Medical. Meanwhile, the Label and Processing business area can be further developed together with Munksjö.
"During the past three years, Ahlstrom has systematically executed its strategy towards becoming a focused high performance materials company. This transaction of combining the Label and Processing business area with Munksjö is the most significant step in our strategy execution. It allows us to concentrate our resources to the areas where we see the most attractive value-add and growth opportunities," says Jan Lång, President and CEO of Ahlstrom.
"The essence of our strategy is that our high performance materials protect people, purify air and liquids and provide surface and structure to our customers' products. In addition to reinforcing our global leadership in Filtration, we seek growth opportunities in high performance materials for building, food packaging and medical applications," Lång continues.
"We expect this transaction to enhance value for Ahlstrom's shareholders through ownership in two focused publicly listed companies that are global leaders in their respective fields," concludes Lång.
The other major step in the process of Ahlstrom focusing its business operations was the divestment of the Home and Personal business area to Suominen Corporation in 2011. Ahlstrom expects the future growth to be realized through organic growth as well as acquisitions and partnerships in the three business areas.
The planned transaction will be executed through two partial demergers. In the first phase, Ahlstrom and EQT, the principal owner of Munksjö AB, will establish a new company to be named Munksjö Corporation (in Finnish Munksjö Oyj) to acquire the operations of Munksjö AB in exchange for new shares in Munksjö Corporation. The European operations of Ahlstrom's Label and Processing business area are then separated through a partial demerger and transferred into Munksjö Corporation in exchange for shares in Munksjö Corporation to be distributed to Ahlstrom's shareholders.
Prior to the public listing of the new company, new shares in Munksjö Corporation worth approximately EUR 100 million will be offered in a directed share issue to selected institutional investors, including Ahlstrom, Varma, Ilmarinen and EQT, to strengthen the capital structure of the new company. The investors are fully committed to subscribe for the shares in the directed issue. The first phase is expected to be completed during the first quarter of 2013.
In the second phase, following the public listing of the new company, Coated Specialties, the Brazilian part of Ahlstrom's Label and Processing business area, will be separated through another partial demerger into Munksjö Corporation. This is to allow enough time for receiving all the necessary regulatory approvals in Brazil. These approvals are not a prerequisite for completing the first phase and the public listing of Munksjö Corporation. The second phase is expected to be completed by the end of the second quarter of 2013.
In 2011, the Label and Processing business (the combined LP Europe and Coated Specialties) had net sales of EUR 681 million[1] and an EBITDA (excluding non-recurring items) margin of 5.11] percent. The business area employs approximately 1,500 people and has six plants in Europe and South America. Its main products include release liners, self-adhesive labels, base paper for metalized labels, flexible packaging papers, poster papers, decor papers, and abrasive backings. The plants that will be part of the transaction include Osnabrück in Germany; La Gere, Rottersac and Stenay in France, the Label and Processing operations in Turin, Italy, as well as the Coated Specialties plant in Jacarei, Brazil.
Munksjö AB is a Swedish specialty papers company currently with the privaate equity firm EQT as its main owner. The net sales of Munksjö on a pro forma basis totaled approximately EUR 645 million[2] in 2011, and its EBITDA on a pro forma basis (excluding non-recurring items) margin was 7.6[2] percent. The company employs about 1,800 people and has ten plants in Europe and Asia. Its main products include decor papers, abrasive backings, electrotechnical papers, and long-fiber specialty pulp.
Jan Åström, President & CEO of Munksjö AB, will become the President & CEO of the new company. The parties have agreed that the Chairman of the intermediate Board of Directors of Munksjö Corporation will be appointed by Ahlstrom. Peter Seligson has been appointed as an intermediate Chairman of Munksjö Corporation. The head office of Munksjö Corporation will be located in Stockholm, and its shares will be listed on the NASDAQ OMX Helsinki.