RAUTARUUKKI OYJ : Ruukki and CapMan create Fortaco, Europe's leading manufacturing partner for the engineering industry - Ruukki focuses on construction and special steels business
10/17/2012| 02:05am US/Eastern
Rautaruukki Corporation Stock Exchange Release 17 October 2012 at 9:00 am EEST
Rautaruukki Corporation (Ruukki) and funds managed by CapMan (CapMan) have agreed to combine units of Komas and units of Ruukki Engineering division to form a new company. The name of the company will be Fortaco and it will be Europe's largest actor in its field.
Ruukki's ownership in the company to be formed will be 19.0 per cent, and in addition Ruukki will receive a cash payment of around EUR 25 million and equity-linked securities worth around EUR 81 million in the company - totaling around EUR 114 million, which corresponds to the total value of assets which Ruukki will transfer to the new company. Completion of the transaction is subject to approval from the competition authorities and is expected to be finalised by early December 2012. The transaction will not affect Ruukki's financial reporting before the arrangement is finalised.
"The engineering industry sub-suppliers are expected to provide increasingly stronger cost-competitiveness in component deliveries as well as specialised know-how. This new combination will have efficient component production units located near the customers' markets. Success of the new company will be essential for Ruukki as regards both the development in steel volumes and the expected return on invested capital" says Sakari Tamminen, President and CEO of Rautaruukki Corporation.
Fortaco is expected to generate pro-forma net sales of approximately EUR 270 million in 2012 and will have a total of approximately 2,600 employees. The company will be formed from the compatible and complementary units of Ruukki and Komas. Ruukki Engineering units in Jaszbereny (Hungary), Wroclaw (Poland) and Holic (Slovakia) as well as Kurikka, Sepänkylä and the Kalajoki component business (Finland) will transfer to the new company. Net sales of the units contributed by Ruukki totalled EUR 158 million in 2011. Net sales of the Ruukki Engineering units excluded from the transaction totalled some EUR 100 million in 2011. Employees of the units concerned will transfer to the new company on their current employment terms and conditions as "old employees". Komas will contribute with its units in Janow Lubelski (Poland), Narva (Estonia) and Sastamala, Kurikka, Parkano and Härmä (Finland).
"In future, Ruukki will focus on developing the construction and special steels businesses. The construction market offers substantial growth potential, especially in Russia and the rest of the Eastern Europe. We also see good business opportunities in the residential construction and construction of energy-efficient buildings, particularly in Northern Europe. In the special steels business, we will expand our international distribution and service network," adds Tamminen.
Sakari Tamminen, President and CEO, Rautaruukki Corporation, tel. +358 20 592 9075
Marko Somerma, EVP, Ruukki Engineering & CSO Rautaruukki Corporation, tel.+358 20 592 9137
Press and analyst conference:
Ruukki, CapMan and Komas will host a joint conference for the press and analysts starting at 11am at Event Arena Bank, Unioninkatu 20, Helsinki (room Meeting point). The conference will be held in Finnish.
SVP, Marketing and Communications
Ruukki provides its customers with energy-efficient steel solutions for better living, working and moving. Ruukki operates in some 30 countries and employs around 11,800 people. Net sales in 2011 totalled EUR 2.8 billion. The company's share is quoted on NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS).
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Source: Rautaruukki Oyj via Thomson Reuters ONE