• Munksjö to combine with Ahlstrom’s Label and Processing business area forming a world leading company in specialty paper with EUR 1.3 billion in net sales
• A new company will be created, a Finnish company named Munksjö Corporation with its head office in Stockholm, Sweden
• Munksjö Corporation is expected to achieve annual synergies of about EUR 25-30 million once fully implemented
• Munksjö Corporation is expected to be listed on NASDAQ OMX Helsinki during Q1/2013. A future listing on NASDAQ OMX Stockholm is being considered
• The combination is a natural step in Munksjö’s growth strategy within specialty paper after the acquisition of the Decor, Abrasives, Thin Print Papers and Fine Art businesses of ArjoWiggins in 2011
Munksjö and Ahlstrom Corporation have agreed on combining Ahlstrom’s Label and Processing business area with Munksjö, forming a new company to be named Munksjö Corporation. The new company will be a global leader in specialty paper with combined net sales in 2011 of EUR 1.3 billion. The new company will have approximately 3,300 employees at 16 production sites in Europe, Brazil and China.
“The planned combination is the natural next step in Munksjö’s strategy to become a leading, global specialty paper company, following the acquisition of ArjoWiggins’ Decor, Abrasives, Thin Print Papers and Fine Art businesses in 2011. It will lead to strengthened competitiveness and efficiency and bring added growth opportunities to the company, organically as well as strategically”, says Jan Åström, President and CEO of Munksjö.
Following the proposed transaction Munksjö´s current shareholders will own approximately 29 percent of the new company and Ahlstrom’s current shareholders will own approximately 50 percent. Institutional investors Varma and Ilmarinen as well as Ahlstrom and EQT III have been offered shares in a EUR 100 million directed share issue. The directed share issue is fully subscribed. The new company has fully committed credit facilities with a net debt of approximately EUR 300 million at closing, leading to a capital structure well in line with the peer group.
Trading of the shares in the new company is expected to commence during the first quarter of 2013 on NASDAQ OMX Helsinki.
Transaction rationale
The clear strategic fit between the two business both with speciality paper as the core business, will serve as a platform for continued growth.
The new combined company will become one of the world’s largest specialty paper companies with strong market positions in attractive market segments. Munksjö will, after the transaction, offer and serve its global customers with a unique product offering for a large number of fibre-based industrial applications and consumer-driven products. The customer relationships, deep knowledge of customer needs and high technical expertise in production and product development will contribute to the sustainability of these strong market positions.
The transaction is expected to create synergies in the form of cost savings and efficiency improvements. Annual synergies, once fully implemented, are estimated to reach EUR 25-30 million, mainly relating to purchasing, production efficiencies, pulp, logistics and sales. Of the identified synergies, 60 percent are expected to be achieved within 12 months following the closing of the transaction. The remaining synergies are expected to be reached within the following two to three years.
(Munksjö Paper AB)