Trelleborg divests Trenor holding to Nordic Capital
The Trelleborg Group has entered into an agreement to sell its 49-percent holding in the Trenor Group to Nordic Capital Funds IV and V. As a consequence, the Trenor Group will be 100-percent controlled by Nordic Capital.
The purchase price for Trelleborg's holding amounts to SEK 1,100 M. For a debt-free company, this corresponds to an EBITA multiple of approximately nine times earnings in 2003.
In 1999, Trelleborg and Nordic Capital Fund III started a jointly owned company under the name of Trenor, to which Trelleborg's former distribution operations were sold and in which Nordic Capital acquired a 51-percent interest. Today, the Trenor Group comprises the trading companies Ahlsell (plumbing and electrical supplies wholesaler), Bröderna Edstrand (steel wholesaler) and Reynolds (metal wholesaler). Together, the three operations generate sales of approximately SEK 15 billion annually.
The purpose of the sale of the distribution operations and the creation of the Trenor Group, in addition to the streamlining of the Trelleborg Group, was to free capital for the expansion of the Group's industrial operations.
"The sale represents the last important step in the repositioning of the Trelleborg Group, which was begun in 1999," says President and CEO Fredrik Arp. "Our resources can now be focused entirely on the development of our own Group."
At implementation, the sale will generate a positive cash flow of SEK 1,100 M. In addition, pledged financial assets of SEK 150 M will be released.
Free cash flow per share for 2003 will increase pro forma by approximately SEK 0.40, while earnings per share will decrease in a corresponding manner by approximately SEK 0.85.
The capital gain is estimated at approximately SEK 600 M. A guarantee to Nordic Capital Fund III remains valid regarding the valuation of Bröderna Edstrand in the event of a future sale to a third party. This guarantee may cost the Trelleborg Group a maximum of SEK 80 M. This has been taken into account in assessing the capital gain.
The transaction is subject to the approval of the relevant competition authorities and it is expected that the transaction will be completed during the second quarter.
For further information, contact Senior Vice President, Corporate Communications, Mikael Byström, +46 410-670 37 or +46 708-55 21 69, or CFO Bo Jacobsson, +46 410-670 99 or +46 706-85 65 60.
Trelleborg is a global industrial group. Operations are based on spearhead competence within polymer materials and a high level of industrial know-how, combined with functional solutions and systems designed to meet the needs of our customers. The Trelleborg Group has annual sales of approximately SEK 22.5 billion, with about 21,000 employees in 40 countries. Trelleborg consists of five business areas: Trelleborg Automotive, Trelleborg Wheel Systems, Trelleborg Engineered Systems, Trelleborg Building Systems and Trelleborg Sealing Solutions. The Trelleborg share has been quoted on the A list of Stockholmsbörsen since 1964. www.trelleborg.com
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