Ahlstrom Corporation STOCK EXCHANGE RELEASE May 13, 2013 at 18.00 EET
Not to be distributed in or into Australia, Canada, the Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa or the United States.
Ahlstrom Corporation has today signed an amendment agreement with EQT, the principal owner of Munksjö, related to the proposed combination of Ahlstrom's Label and Processing business area and Munksjö AB, to create Munksjö Oyj, a leading manufacturer of specialty papers. The amendment agreement covers an additional equity investment in Munksjö Oyj and the net debt position of Ahlstrom's Label and Processing business in Europe (LP Europe) and Munksjö AB as per March 31, 2013. The agreement also details the consequences of the commitments that Ahlstrom and Munksjö AB have provided to address the competitive concerns of the European Commission with respect to the abrasive backings and pre-impregnated decor paper businesses that are part of the planned combination.
To strengthen the balance sheet and to address the consequences of the remedy proposal made to the EU Commission, the parties have agreed to make an equity investment in the new Munksjö Oyj totalling approximately EUR 28.5 million, in addition to the previously agreed EUR 100 million. The equity investment will be made by Ahlstrom, EQT and the shareholders of Munksjö AB through Munksjö AB. Ahlstrom has increased its original commitment by EUR 16.0 million to EUR 78.5 million and EQT has increased its original commitment by EUR 1.0 million to EUR 13.5 million by subscribing and paying for additional new shares in Munksjö Oyj. Munksjö AB's commitment amounts to EUR 11.5 million.
Based on the net debt determination of LP Europe as per March 31, 2013, Ahlstrom will receive EUR 151.5 million related to a net debt transfer to Munksjö Oyj in connection with the completion of the LP Europe part of the combination. Further, it has been agreed that Munksjö AB's shareholders, based on the net debt determination of Munksjö as per March 31, 2013, will receive a net debt related compensation amounting to EUR 11.5 million, which the shareholders intend to use for the equity investment in the new Munksjö Oyj, committed to by Munksjö AB as mentioned above.
As a consequence of the commitments that Ahlstrom and Munksjö AB have provided to the European Commission, the parties have agreed that Ahlstrom will purchase back all the shares in Ahlstrom Osnabrück GmbH in Germany from Munksjö Oyj at an enterprise value of EUR 48 million immediately after the LP Europe completion has occurred. The abrasive backings and pre-impregnated decor paper businesses will then be divested to a third party.
The commitments to the European Commission will affect the expected synergies of the combination of Ahlstrom's Label and Processing business area and Munksjö AB by approximately EUR 5 million annually. Consequently, the combination is expected to create savings for Munksjö Oyj through synergies and efficiency improvements in the range of EUR 20-25 million annually. Of the identified synergies, a run-rate of about 60 per cent is expected to be achieved within 12 months following the LP Europe completion and the rest during the following two years. Total costs to achieve these synergies are estimated to be EUR 10-15 million in cash, of which approximately EUR 6 million is expected to be incurred during the first 12 months and the remainder during the following two years. In addition to the synergies, further annual cost improvements of approximately EUR 10-15 million are expected related to standalone cost savings.
The LP Europe Completion is expected to take place on or before May 27, 2013, provided that the relevant competition clearances, e.g. from the European Commission, are obtained prior to that.
For more information, please contact:
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Ahlstrom in brief
Ahlstrom is a high performance fiber-based materials company, partnering with leading businesses around the world to help them stay ahead. Our products are used in a large variety of everyday applications, such as filters, medical gowns and drapes, diagnostics, wallcoverings, flooring and food packaging. We have a leading market position in the businesses in which we operate. In 2012, Ahlstrom's net sales from the continuing operations (excluding Label and Processing business) amounted to EUR 1 billion. Our 3,800 employees serve customers in 28 countries on six continents. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. More information available at www.ahlstrom.com.
This document may not be distributed in or into Australia, Canada, the Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa or the United States. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
This document is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Ahlstrom Corporation, Munksjö AB and Munksjö Corporation have not registered, and do not intend to register, any offering of the Munksjö shares in the United States. There will be no public offering of the Munksjö shares in the United States. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order or (iv) persons who are members or creditors of the company to which this communication relates, falling within article 43(2) of the Order (all such persons in (i), (ii) (iii) and (iv) above together being referred to as 'relevant persons'). Any investment activity to which this document relates will be only available to and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
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Source: Ahlstrom Oyj via Thomson Reuters ONE