Kesko has acquired Onninen - new building and technical trade division to continue international growth
(Thomson Reuters ONE) -
KESKO CORPORATION STOCK EXCHANGE RELEASE 01.06.2016 AT 12.00 1(4)
Kesko has acquired Onninen - new building and technical trade division to
continue international growth
Kesko Corporation has acquired Onninen Oy's whole share capital from Onvest Oy.
The acquisition does not include Onninen's steel business or Russian subsidiary.
The new entity that combines the building and home improvement trade and the
technical trade will make Kesko an even stronger international operator in
Europe. Kesko's home improvement and speciality goods trade division is renamed
the building and technical trade division. Owing to the acquisition, Kesko has
updated its outlook.
In 2015, the pro forma net sales of the acquired business were ?1,465 million
and the EBITDA was ?39 million. The price of the debt-free acquisition,
structured as a share purchase, is ?369 million. Onninen has around 3,200
employees and 150 units in seven countries.
On 12 January 2016, Kesko Corporation announced in a stock exchange release that
it would acquire Onninen Oy's whole share capital from Onvest Oy. Onninen's
steel business and Russian subsidiary are not included in the acquisition. The
permissions required for the acquisition have been obtained from the Finnish
Competition and Consumer Authority and the European Commission. The permissions
do not contain any conditions.
Total solutions for customers as the keys to growth
The acquisition of Onninen will accelerate the implementation of Kesko's
international growth strategy and provide significant synergy potential. Kesko's
business operations will expand in the HEPAC and electrical product groups and
it will be able to better serve contractor customers in particular. In addition
to this, Kesko will gain new customer relationships from the infrastructure and
industry customer groups. Both companies operate in the Baltic Sea Region and
Scandinavian markets constituting the most comprehensive store network and the
largest sales organization in northern Europe.
"Kesko is clearly the most internationalised trading sector company in Finland.
The acquisition of Onninen will further strengthen our position in Finland and
open up new interesting opportunities for growth in the European building and
technical trade. In addition to B2C customers, we also want to serve B2B
customers with even better total solutions and services. Onninen is a perfect
match for Kesko's building and home improvement trade business," says Kesko's
President and CEO Mikko Helander.
Focusing on B2B customers is due to global megatrends. Consumers increasingly
often buy services from companies and an increasing share of building and
renovation work is performed by professionals. Especially renovation building
that boosts the demand for Onninen's product lines and areas of expertise is
growing. Urbanisation, the rising standard of living and the ageing of
population are increasing the use of services.
"The standard of living is growing and building is becoming increasingly
technical. People are less eager to build and renovate themselves, which is why
there has been a significant growth in interest in the comprehensive solutions
we offer. This, in turn, means more work for building, HEPAC and electrical
engineering companies, in other words, our B2B customers. Our objective is to
create an entity of building and technical trade services for our customers in
which building and renovation service providers and consumers meet - an
ecosystem of services," says Terho Kalliokoski, Kesko Executive Vice President
and the President for the building and technical trade division.
Division renamed the building and technical trade
The home improvement and speciality goods trade division is renamed the building
and technical trade division. The name is changed because the focus of the
division has shifted to technical trade and B2B customers. The division is led
by Kesko Executive Vice President and Division President Terho Kalliokoski.
Mikko Pasanen has been appointed Onninen's CEO. He is responsible for the B2B
business of Kesko's building and technical trade and reports to Terho
Kalliokoski.
Financial impacts of the acquisition
Kesko estimates that the acquisition will generate around ?30 million in annual
synergies at the EBITDA level from 2020 onwards. The achievement of synergies
will require both capital expenditures and non-recurring costs. The combined net
cash flow impact of synergies is estimated at around ?25 million positive in
2016-2019.
Economies of scale and synergies will mainly be sought from common customer
relationships, purchasing and logistics, the development of the store site
network, as well as from ICT and administration.
The fair value allocations of the transaction price to net assets are estimated
to cause an expense item of around ?5 million on the first six months.
The transaction was paid in cash from Kesko's liquid assets and available debt
financing reserves.
Updated outlook
The outlook in Kesko's interim report published on 27 April 2016 was as follows:
"Estimates for the outlook of Kesko Group's net sales and operating profit
excluding non-recurring items are given for the 12-month period following the
reporting period (4/2016-3/2017) in comparison with the 12 months preceding the
end of the reporting period (4/2015-3/2016). Kesko Group's net sales for the
next 12 months are expected to exceed the level of the preceding 12 months. The
operating profit excluding non-recurring items for the next 12-month period is
expected to equal the level of the preceding 12 months. The outlook does not
take account of the acquisition of Onninen, in respect of which estimates will
be given in connection with its completion."
As a result of the completion of the acquisition of Onninen, Kesko's outlook has
been updated. According to the updated outlook, Kesko Group's net sales and
operating profit excluding non-recurring items for the period 4/2016-3/2017 are
estimated to exceed the level of the period 4/2015-3/2016.
Briefing in Finnish today at 14.00
A briefing in Finnish will be held today at 14.00 in Kesko's Dekostudio at
Bulevardi 46, Helsinki. Kesko's Dekostudio is a meeting place intended for
building and interior decoration professionals, designers and architects, and a
product showroom. Dekostudio will open at 13.30 for taking a look around before
the briefing.
The briefing can be viewed on webcast at www.kesko.fi. Further information about
the briefing is available at www.kesko.fi/tiedotustilaisuus.
Onninen Group's profit performance and financial position
INCOME STATEMENT 1.1. - 31.12. 1.1. - 31.12.
2015 2014
Net sales 1,465 1,401
Cost of goods sold -1,187 -1,134
Gross profit 278 266
Employee benefit expenses -139 -130
Other operating expenses -100 -103
EBITDA 39 34
Depreciation -11 -11
EBITA 28 23
Amortisation -1 -2
Operating profit 27 21
Finance income and expenses 0 -1
Profit before tax 27 20
Income tax -7 -6
Profit for the period 19 14
BALANCE SHEET 31.12.2015 31.12.2014
ASSETS
Non-current assets
Intangible assets 29 29
Tangible assets 13 11
Deferred tax assets 6 5
Total non-current assets 49 45
Current assets
Inventories 213 206
Trade receivables 178 163
Other receivables 19 13
Cash and cash equivalents 1 1
Total current assets 411 382
TOTAL ASSETS 460 427
EQUITY AND LIABILITIES
Equity 142 131
Total equity 142 131
Provisions 0 1
Non-current liabilities
Interest-bearing liabilities 55 50
Current liabilities
Interest-bearing liabilities 35 53
Trade payables 174 144
Other non-interest-bearing 52 47
liabilities
Deferred tax liabilities 2 2
Total current liabilities 263 246
TOTAL EQUITY AND LIABILITIES 460 427
The information in the pro forma income statements and balance sheets is
unaudited and is based on Onninen Group's management reporting.
Further information:
Terho Kalliokoski, Executive Vice President and President for the building and
technical trade division, tel. +358 105 320 200, terho.kalliokoski(at)kesko.fi
Jukka Erlund, Senior Vice President, Chief Financial Officer, tel.
+358 105 322 113, jukka.erlund(at)kesko.fi
Lauri Peltola, Senior Vice President, communications, corporate responsibility
and stakeholder relations, tel. +358 105 322 400, +358 505 705 606,
lauri.peltola(at)kesko.fi
Kesko Corporation
Merja Haverinen
Vice President, Group Communications
DISTRIBUTION
Nasdaq Helsinki Ltd
Main news media
www.kesko.fi
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Kesko Oyj via GlobeNewswire
[HUG#2017080]
Unternehmensinformation / Kurzprofil:
Datum: 01.06.2016 - 11:01 Uhr
Sprache: Deutsch
News-ID 474857
Anzahl Zeichen: 11864
contact information:
Town:
Kesko
Kategorie:
Business News
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