Ahlstrom and Munksjö to combine, creating a global leader in sustainable and innovative fiber-based solutions
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Ahlstrom Corporation STOCK EXCHANGE RELEASE November 7, 2016 at 08:30
Ahlstrom and Munksjö to combine, creating a global leader in sustainable and
innovative fiber-based solutions
The Boards of Directors of Munksjö Oyj ("Munksjö") and Ahlstrom Corporation
("Ahlstrom") announce the combination of the two companies through a merger.
* The combination will create a global leader in sustainable and innovative
fiber-based solutions with preliminary combined annual net sales of
approximately EUR 2.2 billion and adjusted EBITDA of EUR 249 million(i). The
combined company will have approximately 6,200 employees as well as
production in 14 countries.
* The combination is expected to create significant value for the stakeholders
in the combined company through stronger global growth opportunities and
improved operational efficiency. The combined company's growth ambitions
will be supported by a strong balance sheet and strong cash flow generation.
* Annual cost synergies are estimated to be approximately EUR 35 million. The
cost synergies are expected to be gradually realised over two years
following completion of the combination with a more pronounced impact
expected from the fourth quarter of 2017.
* The combination will be implemented as a statutory absorption merger whereby
Ahlstrom will be merged into Munksjö.
* Ahlstrom's shareholders will receive as merger consideration 0.9738 new
shares in Munksjö for each share in Ahlstrom owned by them, corresponding to
an ownership in the combined company following the completion of the
combination of approximately 52.8% for Munksjö shareholders and
approximately 47.2% for Ahlstrom shareholders.
* Based on the one-month volume-weighted average share prices of both
Munksjö and Ahlstrom, the corresponding ownership of Munksjö and
Ahlstrom shareholders would have been approximately 52.1% / 47.9%,
respectively(ii)
* Based on the three-month volume-weighted average share prices of both
Munksjö and Ahlstrom, the corresponding ownership of Munksjö and
Ahlstrom shareholders would have been approximately 54.0% / 46.0%,
respectively(iii)
* Munksjö and Ahlstrom propose to distribute funds in the total amount of
approximately EUR 23 million each, corresponding to EUR 0.45 per share in
Munksjö and EUR 0.49 per share in Ahlstrom, to their respective shareholders
before the combination is completed in lieu of the companies' ordinary
annual distribution.
* The completion of the combination is subject to, inter alia, approval by the
Extraordinary General Meetings (each, an "EGM") of Munksjö and Ahlstrom,
which are currently expected to be held on 11 January 2017, as well as
merger control approvals from relevant competition authorities.
* The combined entity has obtained underwritten financing for the merger from
Nordea and SEB.
* Shareholders holding in aggregate approximately 32.9% of the shares and
votes in Ahlstrom and approximately 39.6% of the shares and votes in
Munksjö, have irrevocably undertaken to attend the companies' respective
EGMs and to vote in favour of the combination.
* The combination is expected to be completed in the beginning of the second
quarter of 2017.
* Financial targets for the combined company are expected to include an EBITDA
margin above 14% over a business cycle, net gearing below 100%, as well as a
stable and annually increasing dividend.
Peter Seligson, Chairman of the Board of Munksjö, commented:
"After the very successful integration of our acquired businesses during the
past years and strong operating performance, the combination with Ahlstrom is a
natural first step in the execution of our growth strategy, combining two
leading businesses into one strong engine for performance and growth. The
combined company will be positioned for strong long term-financial returns
partly through the significant communicated cost synergies but mainly through
enhanced future competitiveness and growth opportunities."
Hans Sohlström, Chairman of the Board of Ahlstrom, continued:
"During the past two years the Ahlstrom management has executed a very focused
and successful business turn-around by shedding costs and by focusing on
commercial excellence with new products and value adding solutions for our
customers. The financial results speak for themselves. The combination now
enables us to directly jump into a growth mode with a much stronger balance
sheet and greater earnings potential which will benefit our shareholders and our
customers as well as other stakeholders. We will together be able to leverage
several strategic advantages and we will focus on shareholder returns through
increased profits as well as profitable global growth initiatives in the area of
sustainable and innovative fiber-based solutions."
Jan Åström, President and CEO of Munksjö, commented:
"Munksjö and Ahlstrom are two solid and profitable companies with strong cash
flows that already today have attractive positions within their respective
businesses. Together we will form an even stronger growth platform supported by
the cost synergies identified but also by the added top line opportunities. The
offerings and market presences are complementary, enabling us to offer our
customers a broader range of solutions with a truly global reach. Our collective
quality leadership, know-how and innovation capacity will add further value to
all customers. About 90 per cent of the combined company's products are made
from renewable fibers, which will be increasingly important for our
sustainability ambitions and footprint going forward."
Press and analyst conference
A joint press conference and conference call will be held today, 7 November
2016, at 11:00 a.m. EET (10:00 a.m. CET), at Restaurant Savoy (Eteläesplanadi
14, 7th floor) in Helsinki, Finland. Please see below for additional details.
BACKGROUND TO THE COMBINATION
Munksjö and Ahlstrom are both focused on sustainable and innovative fiber-based
solutions. The companies have also had a jointly operated site in Turin, Italy
since the business combination of Munksjö AB and Ahlstrom's Label and Processing
business in 2013. For the past years, both companies have focused on
streamlining operations and improving operational efficiency with clear results.
The combination is a natural next step in the development of the two companies
as it has a strong strategic logic and is expected to improve competitiveness.
The combination is also expected to increase and create new growth opportunities
through the complementary customer bases, product portfolios and geographical
footprints of the two companies. The companies also believe that by combining
their operations they can achieve further efficiency improvements as well as
benefits of scale in the capital markets in the form of increased liquidity,
investor interest and analyst coverage. As a result of their history, both
companies know each other well and strongly believe the companies will have a
good operational fit. Therefore, the Boards of Directors of Munksjö and Ahlstrom
have, on 7 November 2016, entered into a combination agreement (the "Combination
Agreement") and executed a merger plan, pursuant to which the companies will
combine. The merger plan and a summary of the Combination Agreement are included
as annexes to this stock exchange release.
RATIONALE FOR THE COMBINATION
The combination will create a global leader in sustainable and innovative fiber-
based solutions (more than 90% produced from renewable fibers), with leading
global positions in the main product areas decor, filtration and release liners.
The combined company will be better positioned to serve customers and will have
a strengthened position in the value chain through increased size.
Through the combination, a strong and well-established platform will be created
with multiple growth opportunities through a broadened customer base, a widened
geographical footprint and expanded product and service offerings. Together, the
companies will be able to serve a broad range of end-market segments with
complementary product and service offerings (e.g., filtration and abrasives to
the automotive industry as well as food and beverage packaging and release
liners to the food and beverage industry), which creates potential for
innovation within new customer-focused solutions. The two companies have
complementary geographical footprints, as Munksjö has strong market positions in
Europe and South America and Ahlstrom has strong market positions in Europe,
North America and Asia, which opens up new geographical growth opportunities
through coordination of the product portfolios and distribution and logistics
networks. The combined company will have a more diversified revenue and earnings
base through this wider geographic footprint and broader product offering and is
expected to have a strong financial position and cash flow to support the
combined company's strategic growth ambitions. The increased size and
strengthened capital base also gives potential for increased financing options
and lower cost of debt. Furthermore, the combination offers employees enhanced
career opportunities, supporting the combined company's ability to attract and
retain top talent.
Synergies
The combination is expected to create significant value for the stakeholders in
the combined company through synergies resulting from the coordination of the
operations of the two companies. Short to mid-term, the annual cost synergies
are estimated to be approximately EUR 35 million.
The majority of the planned cost synergies are expected to be achieved through
organisational streamlining, mainly within general, administrative and sales
expenses (SG&A) as well as through a focusing of central administration and a
combination of administration for closely located sales offices and mills. The
remaining planned cost synergies are mainly expected to be reached through
coordination of purchasing and production.
The annual cost synergies are expected to be gradually realised over two years
following completion of the combination. A more pronounced impact on the
combined company's profitability is expected from the fourth quarter of 2017 and
the cost synergies are expected to be fully realised as from the second quarter
of 2019. Integration costs of approximately EUR 30 million are expected to have
nonrecurring cash flow impacts from the third quarter of 2017 to the second
quarter of 2018, with the majority of nonrecurring costs impacting the second
and third quarters of 2017. Munksjö and Ahlstrom will inform, consult and
negotiate with relevant employee organisations regarding the social, economic
and legal consequences of the proposed combination in accordance with the
applicable legal requirements.
The combined company will continue to evaluate additional revenue and cost
synergies beyond the current plan through leveraging the combined R&D platform,
cross selling through the combined customer base and further coordination of
production, sales and procurement.
THE COMBINED COMPANY
Overview
The combined company will become a global leader in sustainable and innovative
fiber-based solutions with preliminary combined annual net sales of
approximately EUR 2.2 billion and EBITDA of EUR 249 million for the twelve
months ended 30 September 2016, and approximately 6,200 employees. The combined
company will have 41 production and converting facilities in 14 countries and
will have leading global positions in its main product areas:
* Decor: Surface cover for wood-based panels, used in the production of
furniture, flooring and other interior and exterior architectural panels.
* Filtration: Products used for automotive applications (oil, fuel, and air
filters), gas turbines, and indoor air quality filters. Advanced filter
applications for, among others, laboratory use and life science
applications.
* Industrial Solutions: Release liners and other products used for, among
others, labelling, specialty tapes, abrasive backings, electrotechnical
insulation and other industrial applications.
* Specialties: Specialty products used for, among others, building and wind
applications, medical care, hygiene and food packaging.
Board of Directors and Management
Following consultation with the shareholders' nomination board of each of
Munksjö and Ahlstrom, the Board of Directors of Munksjö will make a proposal to
the EGM of Munksjö resolving on the combination that Peter Seligson, Elisabet
Salander Björklund, Sebastian Bondestam, Alexander Ehrnrooth, Hannele Jakosuo-
Jansson, Mats Lindstrand and Anna Ohlsson-Leijon, current members of the Board
of Directors of Munksjö, be conditionally elected to continue to serve on the
Board of Directors of Munksjö following the completion of the combination and
that Hans Sohlström, Jan Inborr, Johannes Gullichsen and Harri-Pekka Kaukonen,
current members of the Board of Directors of Ahlstrom, be conditionally elected
as members of the Board of Directors of Munksjö following the completion of the
combination. The nominees have indicated that if elected they will elect Hans
Sohlström as Chairman of the Board of Directors of Munksjö, and Peter Seligson
and Elisabet Salander Björklund as Vice-Chairmen of the Board of Directors of
Munksjö.
Munksjö's current CEO, Jan Åström, will continue to serve as the CEO of the
combined company. The management team of the combined company will also include
the current CFO of Munksjö, Pia Aaltonen-Forsell, and the current CFO of
Ahlstrom, Sakari Ahdekivi.
Ownership Structure and Corporate Governance
Pursuant to the merger plan, Ahlstrom shareholders will receive as merger
consideration 0.9738 new shares in Munksjö for each share in Ahlstrom owned by
them, corresponding to an ownership in the combined company following the
completion of the combination of approximately 52.8% for Munksjö shareholders
and approximately 47.2% for Ahlstrom shareholders. The table below illustrates
the largest owners of the combined company, assuming all current Ahlstrom
shareholders are also shareholders at the completion of the combination.
+----------------------------------------------------------------+
|Owner % of shares and votes|
+----------------------------------------------------------------+
|Ahlström Capital(iv) 13.4%|
| |
|Virala group of companies(v) 12.6%|
| |
|Ilmarinen Mutual Pension Insurance Company 4.7%|
| |
|Varma Mutual Pension Insurance Company 2.4%|
| |
|OP Mutual Funds 2.3%|
+----------------------------------------------------------------+
|Top 5 shareholders 35.4%|
| |
|Other shareholders 64.6%|
+----------------------------------------------------------------+
|Total 100.0%|
| |
| |
| |
|Ahlstrom shareholders 47.2%|
| |
|Munksjö shareholders 52.8%|
| |
| |
+----------------------------------------------------------------+
The combined company will have a primary listing on Nasdaq Helsinki Ltd and a
secondary listing on Nasdaq Stockholm Ltd. The combined company will be
domiciled in Finland.
The combined company will provisionally be called Ahlstrom-Munksjö Oyj, with the
intention to propose a new name by the time of completion of the combination for
approval by the annual general meeting of Munksjö following the completion of
the combination.
Divestment of Osnabrück plant
As announced by Ahlstrom on 7 November 2016, Ahlstrom has signed an agreement to
divest its German subsidiary with operations in Osnabrück to Kämmerer GmbH. The
transaction will also include Ahlstrom's 50% stake in AK Energie (a joint
venture with Kämmerer). The transaction is expected to be completed in January
2017. For more information, please see the release at
http://www.ahlstrom.com/en/Investors/.
Preliminary Combined Financial Information
Basis for Preparation
The unaudited financial information for the combined company presented below is
based on Munksjö's and Ahlstrom's audited consolidated financial statements for
the year ended 31 December 2015 and unaudited consolidated interim information
for the nine months ended 30 September 2016 and unaudited financial statements
bulletins for the year ended 31 December 2015.
The combined financial information is presented for illustrative purposes only.
The combined income statement information, the combined operating cash flow and
capital expenditure information have been calculated assuming the activities had
been included in one entity from the beginning of each period. The preliminary
annual net sales, adjusted EBITDA and EBITDA of the combined company have been
calculated as a sum of combined financial information for the twelve months
ended 30 September 2016. The combined statement of financial position and
interest-bearing net debt illustrates the impacts of the combination as if it
had occurred on 30 September 2016.
The combined financial information is based on a hypothetical situation and
should not be viewed as pro forma financial information inasmuch as any purchase
price allocation, differences in accounting principles, adjustments related to
transaction costs and impacts of the refinancing have not been taken into
account. The difference between the preliminary merger consideration, which has
been calculated based on the closing price of the shares in Munksjö on 2
November 2016 and Ahlstrom's net assets as at 30 September 2016 has been
allocated to non-current assets. The expected cost synergies have not been
included.
For the purposes of financial reporting, the actual combined financial
information will, however, be calculated based on the final merger consideration
and the fair values of Ahlstrom's identifiable assets and liabilities as at the
date of completion of the combination, including the impacts of the refinancing
that is contingent on the completion of the combination. The combined company's
financial information that will be published in the future following the
completion of the combination could therefore differ significantly from the
illustrative combined financial information presented below. Accordingly, this
information is not indicative of what the combined company's actual financial
position, results of operations or key figures would have been had the
combination been completed on the dates indicated.
Combined Income Statement Information
+--------------+-------------------------------+-------------------------------+
| | January - September 2016 | January - December 2015 |
+--------------+--------------+-------+--------+--------------+-------+--------+
|EUR | Combined|Munksjö|Ahlstrom| Combined|Munksjö|Ahlstrom|
|million | company| | | company| | |
+--------------+--------------+-------+--------+--------------+-------+--------+
|Net Sales | 1,680.3| 860.5| 819.8| 2,205.4|1,130.7| 1,074.7|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA (Adj.)*| 205.3| 100.6| 104.7| 198.6| 93.6| 105.0|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA -% | 12.2| 11.7| 12.8| 9.0| 8.3| 9.8|
|(Adj.)* | | | | | | |
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA* | 201.9| 100.6| 101.3| 182.9| 86.3| 96.6|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA -%* | 12.0| 11.7| 12.4| 8.3| 7.6| 9.0|
+--------------+--------------+-------+--------+--------------+-------+--------+
+-----------------+---------------------------------+
| | October 2015 - September 2016 |
+-----------------+----------------+-------+--------+
|EUR |Combined company|Munksjö|Ahlstrom|
|million | | | |
+-----------------+----------------+-------+--------+
|Net Sales | 2,225.3|1,150.5| 1,074.8|
+-----------------+----------------+-------+--------+
|EBITDA (Adj.)* | 249.1| 122.7| 126.4|
+-----------------+----------------+-------+--------+
|EBITDA -% (Adj.)*| 11.2| 10.7| 11.8|
+-----------------+----------------+-------+--------+
|EBITDA* | 239.0| 122.7| 116.3|
+-----------------+----------------+-------+--------+
|EBITDA -%* | 10.7| 10.7| 10.8|
+-----------------+----------------+-------+--------+
* The adjusted EBITDA and EBITDA of Ahlstrom have been adjusted by including
share of profit / loss of equity accounted investments into these line items to
align with Munksjö's reporting format. The adjusted EBITDA of Munksjö and
Ahlstrom exclude items affecting comparability.
The transactions between Munksjö and Ahlstrom have not been eliminated from the
combined income statement information. The combined net sales include
transactions between Munksjö and Ahlstrom that amounted to EUR 18.1 million for
the nine months ended 30 September 2016 and to EUR 30.7 million for the year
ended 31 December 2015. The transactions between Munksjö and Ahlstrom did not
have any impact on the combined EBITDA or adjusted EBITDA.
The income statement information of Ahlstrom has not been adjusted for the sale
of Osnabrück. The net sales of Osnabrück amounted to EUR 60.4 million for the
nine months ended 30 September 2016 and EUR 80.9 million for the year ended 31
December 2015. The EBITDA of Osnabrück amounted to EUR -1.2 million for the nine
months ended 30 September 2016 and EUR -10.7 million for the year ended 31
December 2015. The adjusted EBITDA of Osnabrück amounted to EUR -1.2 million for
the nine months ended 30 September 2016 and EUR -9.1 million for the year ended
31 December 2015.
Combined Statement of Financial Position Information
+----------------------------+---------------------------------+
| | 30 September 2016 |
+----------------------------+----------------+-------+--------+
|EUR million |Combined company|Munksjö|Ahlstrom|
+----------------------------+----------------+-------+--------+
|Non-current assets | 1,600.8| 738.8| 486.0|
+----------------------------+----------------+-------+--------+
|Current assets excl. cash | 571.4| 303.5| 267.9|
+----------------------------+----------------+-------+--------+
|Cash and cash equivalents | 170.7| 116.2| 54.5|
+----------------------------+----------------+-------+--------+
|Total assets | 2,342.9|1,158.5| 808.4|
+----------------------------+----------------+-------+--------+
| | | | |
+----------------------------+----------------+-------+--------+
|Total equity | 1,008.5| 424.9| 307.6|
+----------------------------+----------------+-------+--------+
|Non-current liabilities | 642.9| 440.5| 202.4|
+----------------------------+----------------+-------+--------+
|Current liabilities | 691.5| 293.1| 298.4|
+----------------------------+----------------+-------+--------+
|Total equity and liabilities| 2,342.9|1,158.5| 808.4|
+----------------------------+----------------+-------+--------+
| | | | |
+----------------------------+----------------+-------+--------+
|Interest bearing net debt | 430.3| 199.8| 130.5|
+----------------------------+----------------+-------+--------+
The statement of financial position of Ahlstrom has not been adjusted for the
sale of Osnabrück. The financial line items of Osnabrück included in the
statement of financial position of Ahlstrom as at 30 September 2016 are non-
current assets of EUR 3.8 million, current assets excluding cash of EUR 49.3
million, cash and cash equivalents of EUR 2.6 million, total equity of EUR 5.7
million, non-current liabilities of EUR 33.3 million and current liabilities of
EUR 16.7 million. In addition to the cash and cash equivalents of Osnabrück as
at 30 September 2016, Ahlstrom will settle Osnabrück's internal receivable from
Ahlstrom amounting to EUR 26.5 million in connection with the sale of Osnabrück.
The receivable balance as at 30 September 2016 between Munksjö and Ahlstrom
amounting to EUR 2.5 million is not eliminated from the combined current assets
and liabilities balances.
The hybrid bond of EUR 100.0 million recorded in Ahlstrom's equity is included
in current liabilities and interest-bearing net debt in the combined statement
of financial position information.
Combined statement of financial position information has not been adjusted for
the proposals of Munksjö and Ahlstrom to distribute funds in the total amount of
approximately EUR 23 million each to their respective shareholders before the
combination is completed.
Combined Key Figures
+----------------+------------------------------+------------------------------+
| | January - September 2016 | January - December 2015 |
+----------------+-------------+-------+--------+-------------+-------+--------+
|EUR million | Combined|Munksjö|Ahlstrom| Combined|Munksjö|Ahlstrom|
| | company| | | company| | |
+----------------+-------------+-------+--------+-------------+-------+--------+
|Operating cash | 171.9| 73.0| 98.9| 115.5| 55.5| 60.0|
|flow | | | | | | |
+----------------+-------------+-------+--------+-------------+-------+--------+
|Capital | 46.5| 28.5| 18.0| 67.1| 39.8| 27.3|
|expenditure | | | | | | |
+----------------+-------------+-------+--------+-------------+-------+--------+
+-------------------+---------------------------------+
| | October 2015 - September 2016 |
+-------------------+----------------+-------+--------+
|EUR million |Combined company|Munksjö|Ahlstrom|
+-------------------+----------------+-------+--------+
|Operating cash flow| 239.7| 117.5| 122.2|
+-------------------+----------------+-------+--------+
|Capital expenditure| 69.0| 37.4| 31.6|
+-------------------+----------------+-------+--------+
Financial Targets
The Boards of the Directors of Munksjö and Ahlstrom have together with the
management of the companies considered appropriate financial targets for the
combined company and agreed on the following framework. Subsequent to the
completion of the combination, the new management team of the combined company
will together with the Board of Directors of the combined company refine and
possibly adapt these targets.
* EBITDA margin target: EBITDA margin above 14% over a business cycle
* Net gearing target: Net gearing below 100%
* Dividend target: The combined company aims for a stable and annually
increasing dividend
THE MERGER
The Statutory Merger in Brief
The proposed combination of Munksjö and Ahlstrom will be executed through a
statutory absorption merger pursuant to the Finnish Companies Act in such a
manner that all assets and liabilities of Ahlstrom are transferred without a
liquidation procedure to Munksjö.
Ahlstrom's shareholders will receive as merger consideration 0.9738 new shares
in Munksjö to be issued for each share in Ahlstrom (i.e., new shares in Munksjö
will be issued to Ahlstrom's shareholders in proportion to their existing
shareholdings in Ahlstrom in the ratio of 0.9738:1). The aggregate number of the
new shares in Munksjö to be issued is expected to be 45,376,992 shares
(excluding treasury shares held by Ahlstrom and assuming that none of Ahlstrom's
shareholders demand at the EGM of Ahlstrom to decide on the merger that their
shares be redeemed).
Ahlstrom has received an advance tax ruling from the Finnish Tax Office for
Major Corporations (Konserniverokeskus) according to which the statutory merger
will be treated as a tax neutral merger as defined in Section 52 a of the
Finnish Business Income Tax Act.
The completion of the statutory merger is subject to, inter alia, approval by
the EGMs of Munksjö and Ahlstrom currently expected to be held on 11 January
2017, as well as merger control approvals from relevant competition authorities.
The companies will publish the invitations to their respective EGMs through
separate stock exchange releases.
The Board of Directors of Munksjö and Ahlstrom have also agreed to propose to
their respective EGMs the authorisation of the respective Board of Directors to
resolve upon the distribution of funds in the total amount of approximately EUR
23 million each, corresponding to EUR 0.45 per share in Munksjö and EUR 0.49 per
share in Ahlstrom, to their respective shareholders before the completion of the
combination in lieu of the companies' ordinary annual distribution. Munksjö
would implement such distribution as a return of equity from the reserve for
invested unrestricted equity and Ahlstrom would implement such distribution as a
dividend payment. The completion of the combination is expected to take place in
the beginning of the second quarter of 2017, provided that the conditions for
the statutory merger have been fulfilled. Therefore, no annual general meeting
of Ahlstrom is expected to be held in 2017. The 2017 annual general meeting of
Munksjö is expected to be held following the completion of the combination.
The merger plan is included as an annex to this stock exchange release and
contains information, inter alia, on the merger consideration to Ahlstrom's
shareholders, the planned time for completion of the statutory merger, the
division of Ahlstrom's assets and liabilities to Munksjö and the conditions for
the completion of the statutory merger.
Further information about the combination, the merger and the combined company
will also be available in a prospectus to be published by Munksjö prior to the
EGMs of Munksjö and Ahlstrom.
Preliminary Timetable
* December 2016: Publication of merger prospectus
* 11 January 2017: EGMs of Munksjö and Ahlstrom
* Beginning of the second quarter of 2017: Expected completion of the
combination
* On or about first trading date following the completion: Expected first
trading day of the new shares in Munksjö issued to Ahlstrom's shareholders
Fairness Opinions
With support in their assessments in the form of a fairness opinion from the
respective financial advisors of Munksjö and Ahlstrom, the Boards of Directors
of Munksjö and Ahlstrom have concluded that the merger and the merger
consideration are in the best interest of the respective companies and their
respective shareholders.
Financing
The combined entity has obtained underwritten financing for the merger from
Nordea and SEB, as the joint underwriters. The new financing arranged in
connection with the combination consists of the following credit facilities:
* In the aggregate, approximately EUR 560 million multicurrency term and
revolving credit facilities for Munksjö with maturities ranging between
three and five years; and
* EUR 200 million bridge facility for Ahlstrom, which will be assumed by
Munksjö as from the date of completion of the merger with amended terms and
commitments reduced to EUR 100 million. The bridge facility has a maturity
of 18 months from the planned combination date.
The facilities are to be used, inter alia, for the refinancing of existing
indebtedness, for transaction costs and for general corporate purposes. Ahlstrom
intends to obtain relevant waivers and consents for certain existing financing
arrangements. The financing secured for the combined company is expected to
lower its total cost of financing.
Shareholder Support
Shareholders holding in aggregate approximately 32.9% of the shares and votes in
Ahlstrom and approximately 39.6% of the shares and votes in Munksjö, including
Ahlström Capital(vi), Virala group of companies(vii), Ilmarinen Mutual Pension
Insurance Company, Varma Mutual Pension Insurance Company, Peter Seligson(viii),
Johan Erik Gullichsen, Robin Ahlström, Johannes Gullichsen, Thomas Ahlström and
Martti Saikku, have irrevocably undertaken to attend the respective EGMs of
Munksjö and Ahlstrom and to vote in favour of the combination.
Advisors
Munksjö is being advised by Access Partners and SEB as financial advisors, and
White & Case LLP as legal advisor. Ahlstrom is being advised by Nordea as
financial advisor, and Hannes Snellman as legal advisor.
Stockholm, Sweden, 7 November 2016 Helsinki, Finland, 7 November 2016
Board of Directors Board of Directors
Munksjö Oyj Ahlstrom Corporation
PRESS AND ANALYST CONFERENCE
A joint press conference and conference call will be held today, 7 November
2016, at 11:00 a.m. EET (10:00 a.m. CET), at Restaurant Savoy (Eteläesplanadi
14, 7th floor) in Helsinki, Finland.
The presentation held at the event will be made available on the corporate
websites of Munksjö and Ahlstrom during today.
The conference call will be sent live and can be followed on the Internet via
the link below. An on-demand version will be available via the same link later
today.
To join the conference call, participants are requested to dial one of the
numbers below 5-10 minutes prior to the start of the event.
Conference call information
Finnish callers: +358 (0)9 7479 0404
Swedish callers: +46 (0)8 5065 3942
US callers: +1 719-457-2086
UK callers: +44 (0)330 336 9436
Conference ID: 9136329
Link to the webcast: http://qsb.webcast.fi/m/munksjo/munksjo_2016_1107_info/
For further information, please contact
Munksjö Oyj Ahlstrom Corporation
Peter Seligson Hans Sohlström
Chairman of the Board Chairman of the
Board
Tel. +358 50 1493 Tel. +358 400 547 717
Jan Åström
President and CEO
Tel. +46 10 250 1001
Contact person for Ahlstrom bondholders
Sakari Ahdekivi
CFO
Tel. +358 10 888 4768
Communications contacts
Anna Selberg Satu Perälampi
SVP Communications Vice President,
Communications
Tel. +46 703 23 10 32 Tel.
+358 10 888 4738
INFORMATION ON MUNKSJÖ AND AHLSTROM IN BRIEF
Munksjö in Brief
Munksjö is a world-leading manufacturer of advanced paper products developed
with intelligent paper technology. Munksjö offers customer-specific innovative
design and functionality in areas ranging from flooring, kitchens and
furnishings to release papers, consumer-friendly packaging and energy
transmission. The transition to a sustainable society is a natural driving force
for Munksjö's growth as the products can replace non-renewable materials. This
is what "Made by Munksjö" stands for. Given Munksjö's global presence and way of
integrating with the customers, the company forms a worldwide service
organisation with approximately 2,900 employees and 15 facilities located in
France, Sweden, Germany, Italy, Spain, Brazil and China. Munksjö's share is
listed on Nasdaq in Helsinki and Stockholm. Read more at www.munksjo.com.
Ahlstrom in Brief
Ahlstrom provides innovative fiber-based materials with a function in everyday
life. Ahlstrom is committed to growing and creating stakeholder value by proving
the best performing sustainable fiber-based materials. Ahlstrom's products are
used in everyday applications such as filters, medical fabrics, life science and
diagnostics, wallcoverings, tapes, and food and beverage packaging. In 2015,
Ahlstrom's net sales amounted to EUR 1.1 billion. Ahlstrom's 3,300 employees
serve customers in 22 countries. Ahlstrom's share is listed on Nasdaq Helsinki.
More information is available at www.ahlstrom.com.
IMPORTANT NOTICE
The distribution of this release may be restricted by law and persons into whose
possession any document or other information referred to herein comes should
inform themselves about and observe any such restrictions. The information
contained herein is not for publication or distribution, directly or indirectly,
in or into Canada, Australia, Hong Kong, South Africa or Japan. Any failure to
comply with these restrictions may constitute a violation of the securities laws
of any such jurisdiction. This release is not directed to, and is not intended
for distribution to or use by, any person or entity that is a citizen or
resident or located in any locality, state, country or other jurisdiction where
such distribution, publication, availability or use would be contrary to law or
regulation or which would require any registration or licensing within such
jurisdiction.
This release does not constitute a notice to an EGM or a merger prospectus and
as such, does not constitute or form part of and should not be construed as, an
offer to sell, or the solicitation or invitation of any offer to buy, acquire or
subscribe for, any securities or an inducement to enter into investment
activity. Any decision with respect to the proposed statutory absorption merger
of Ahlstrom into Munksjö should be made solely on the basis of information to be
contained in the actual notices to the EGM of Munksjö and Ahlstrom, as
applicable, and the merger prospectus related to the merger as well as on an
independent analysis of the information contained therein. You should consult
the merger prospectus for more complete information about Munksjö, Ahlstrom,
their respective subsidiaries, their respective securities and the merger.
No part of this release, nor the fact of its distribution, should form the basis
of, or be relied on in connection with, any contract or commitment or investment
decision whatsoever. The information contained in this release has not been
independently verified. No representation, warranty or undertaking, expressed or
implied, is made as to, and no reliance should be placed on, the fairness,
accuracy, completeness or correctness of the information or the opinions
contained herein. Neither Munksjö nor Ahlstrom, nor any of their respective
affiliates, advisors or representatives or any other person, shall have any
liability whatsoever (in negligence or otherwise) for any loss however arising
from any use of this release or its contents or otherwise arising in connection
with this release. Each person must rely on their own examination and analysis
of Munksjö, Ahlstrom, their respective subsidiaries, their respective securities
and the merger, including the merits and risks involved.
This release includes "forward-looking statements." These statements may not be
based on historical facts, but are statements about future expectations. When
used in this release, the words "aims," "anticipates," "assumes," "believes,"
"could," "estimates," "expects," "intends," "may," "plans," "should," "will,"
"would" and similar expressions as they relate to Munksjö, Ahlstrom, the merger
or the combination of the business operations of Munksjö and Ahlstrom identify
certain of these forward-looking statements. Other forward-looking statements
can be identified in the context in which the statements are made. Forward-
looking statements are set forth in a number of places in this release,
including wherever this release include information on the future results, plans
and expectations with regard to the combined company's business, including its
strategic plans and plans on growth and profitability, and the general economic
conditions. These forward-looking statements are based on present plans,
estimates, projections and expectations and are not guarantees of future
performance. They are based on certain expectations, which, even though they
seem to be reasonable at present, may turn out to be incorrect. Such forward-
looking statements are based on assumptions and are subject to various risks and
uncertainties. Shareholders should not rely on these forward-looking statements.
Numerous factors may cause the actual results of operations or financial
condition of the combined company to differ materially from those expressed or
implied in the forward-looking statements. Neither Munksjö nor Ahlstrom, nor any
of their respective affiliates, advisors or representatives or any other person
undertakes any obligation to review or confirm or to release publicly any
revisions to any forward-looking statements to reflect events that occur or
circumstances that arise after the date of this release.
This release includes estimates relating to the cost synergy benefits expected
to arise from the merger and the combination of the business operations of
Munksjö and Ahlstrom as well as the related integration costs, which have been
prepared by Munksjö and Ahlstrom and are based on a number of assumptions and
judgments. Such estimates present the expected future impact of the merger and
the combination of the business operations of Munksjö and Ahlstrom on the
combined company's business, financial condition and results of operations. The
assumptions relating to the estimated cost synergy benefits and related
integration costs are inherently uncertain and are subject to a wide variety of
significant business, economic, and competitive risks and uncertainties that
could cause the actual cost synergy benefits from the merger and the combination
of the business operations of Munksjö and Ahlstrom, if any, and related
integration costs to differ materially from the estimates in this release.
Further, there can be no certainty that the merger will be completed in the
manner and timeframe described in this release, or at all.
Notice to Shareholders in the United States
The new shares in Munksjö have not been and will not be registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act") or under any of
the applicable securities laws of any state or other jurisdiction of the United
States. The new shares in Munksjö may not be offered or sold, directly or
indirectly, in or into the United States (as defined in Regulation S under the
Securities Act), unless registered under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act and in
compliance with any applicable state securities laws of the United States. The
new shares in Munksjö will be offered in the United States in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 802 thereunder.
Munksjö and Ahlstrom are Finnish companies. Information distributed in
connection with the merger and the related shareholder votes is subject to
disclosure requirements of Finland, which are different from those of the United
States. The financial information included in this release has been prepared in
accordance with accounting standards in Finland, which may not be comparable to
the financial statements or financial information of United States companies.
It may be difficult for Ahlstrom's shareholders to enforce their rights and any
claim they may have arising under the federal securities laws, since Munksjö and
Ahlstrom are located in non-U.S. jurisdictions, and all of their officers and
directors are residents of non-U.S. jurisdictions. Ahlstrom's shareholders may
not be able to sue Munksjö or Ahlstrom or their officers or directors in a court
in Finland for violations of the U.S. securities laws. It may be difficult to
compel Munksjö and Ahlstrom and their affiliates to subject themselves to a U.S.
court's judgment.
Ahlstrom's shareholders should be aware that Munksjö may purchase Ahlstrom's
securities otherwise than under the merger, such as in open market or privately
negotiated purchases at any time during the pendency of the proposed offer.
(i) Based on the twelve months ended 30 September 2016. Excluding merger effects
and Ahlstrom's divestment of Osnabrück.
(ii) Based on the volume-weighted average share prices of Munksjö (EUR 12.71)
and Ahlstrom (EUR 12.70) on Nasdaq Helsinki Ltd during the last month up to and
including 4 November 2016.
(iii) Based on the volume-weighted average share prices of Munksjö (EUR 11.86)
and Ahlstrom (EUR 10.99) on Nasdaq Helsinki Ltd during the last three months up
to and including 4 November 2016.
(iv) Through AC Invest Five B.V. and AC Invest Six B.V.
(v) Through Vimpu Intressenter Ab and Viknum AB. Includes also the shares held
by Belgrano Inversiones Oy, a company controlled by Alexander Ehrnrooth (and not
a part of the Virala group of companies).
(vi) Through AC Invest Five B.V. and AC Invest Six B.V.
(vii) Through Vimpu Intressenter Ab and Viknum AB. Includes also the shares held
by Belgrano Inversiones Oy, a company controlled by Alexander Ehrnrooth (and not
a part of the Virala group of companies).
(viii) Including holdings of Baltiska Handels A.B.
ANNEX 1
merger plan
The Boards of Directors of Ahlstrom Corporation and Munksjö Oyj propose that
Ahlstrom Corporation shall be merged into Munksjö Oyj through an absorption
merger, so that all assets and liabilities of Ahlstrom Corporation shall be
transferred without a liquidation procedure to Munksjö Oyj, as set forth in this
merger plan (the "Merger Plan") (the "Merger").
As merger consideration, the shareholders of Ahlstrom Corporation shall receive
new shares of Munksjö Oyj, in proportion to their existing shareholdings.
Ahlstrom Corporation shall automatically dissolve as a result of the Merger.
The Merger shall be carried out in accordance with Chapter 16 of the Finnish
Companies Act (624/2006, as amended) (the "Finnish Companies Act") and Section
52 a of the Finnish Business Income Tax Act (360/1968, as amended).
1 Companies Involved in the Merger
1.1 Merging Company
Corporate name: Ahlstrom Corporation (the "Merging Company")
Business ID: 1670043-1
Address: Alvar Aallon katu 3 C, FI-00100 Helsinki, Finland
Domicile: Helsinki, Finland
The Merging Company is a public limited liability company, the shares of which
are publicly traded on the official list of Nasdaq Helsinki Ltd (the "Helsinki
Stock Exchange").
1.2 Recipient Company
Corporate name: Munksjö Oyj (the "Recipient Company")
Business ID: 2480661-5
Address: Eteläesplanadi 14, FI-00130 Helsinki, Finland
Domicile: Helsinki, Finland
The Recipient Company is a public limited liability company, the shares of which
are publicly traded on the official lists of the Helsinki Stock Exchange and
Nasdaq Stockholm AB (the "Stockholm Stock Exchange").
The Merging Company and the Recipient Company are hereinafter jointly referred
to as the "Parties" or the "Companies Involved in the Merger".
2 Reasons for the Merger
The Companies Involved in the Merger have on 7 November 2016 entered into a
business combination agreement concerning the combination of the business
operations of the Companies Involved in the Merger through a statutory
absorption merger of the Merging Company into the Recipient Company in
accordance with the Finnish Companies Act (the "Combination Agreement"). The
purpose of the Merger is to create a global leader in sustainable and innovative
fiber-based solutions, with leading global positions in the main product areas
decor, filtration and release liners. The combined company will be better
positioned to serve customers and will have a strengthened position in the value
chain through increased size. Through the Merger, a strong and well-established
platform will be created with multiple growth opportunities through a broadened
customer base, a widened geographical footprint and expanded product and service
offerings. Together, the Companies Involved in the Merger will be able to serve
a broad range of end-market segments with complementary product and service
offerings, which creates potential for innovation within new customer-focused
solutions. The Companies Involved in the Merger have complementary geographical
footprints inasmuch as the Recipient Company has strong market positions in
Europe and South America and the Merging Company has strong market positions in
Europe, North America and Asia, which opens up new geographical growth
opportunities through coordination of the product portfolios and distribution
and logistics networks. The combined company will have a more diversified
revenue and earnings base through this wider geographic footprint and broader
product offering and is expected to have a strong financial position and cash
flow to support the combined company's strategic growth ambitions. The increased
size and strengthened capital base also gives potential for increased financing
options and lower cost of debt. Furthermore, the Merger offers employees
enhanced career opportunities, supporting the combined company's ability to
attract and retain top talent. The Merger is expected to create significant
value for the stakeholders in the combined company through synergies resulting
from the coordination of the operations of the Companies Involved in the Merger.
3 Amendments to the Recipient Company's Articles of Association
Section 1, the first sentence of Section 2, Section 4 and Section 6 of the
Articles of Association of the Recipient Company are proposed to be amended in
connection with the registration of the execution of the Merger to read as
follows:
"1 § The name of the Company is Ahlstrom-Munksjö Oyj. The domicile of the
Company is Helsinki.";
"2 § The Company's field of business is to engage in the manufacture, converting
and sale of fiber-based solutions and products and in other related or
supporting activities.";
"4 § The Board of Directors of the Company shall comprise a minimum of four (4)
and a maximum of twelve (12) ordinary members."; and
"6 § The Company shall have one (1) auditor, which shall be an audit firm
authorised by the Finnish Patent and Registration Office."
The Articles of Association, including the above proposals, are attached to this
Merger Plan in its entirety as Appendix 1.
4 Board of Directors of the Recipient Company
According to the proposed Articles of Association of the Recipient Company, the
Recipient Company shall have a Board of Directors consisting of a minimum of
four (4) and a maximum of twelve (12) members. The number of the members of the
Board of Directors of the Recipient Company shall be conditionally confirmed and
the members of the Board of Directors shall be conditionally elected by the
Extraordinary General Meeting of the Recipient Company resolving on the Merger.
The term of such members of the Board of Directors shall commence on the date of
registration of the execution of the Merger (the "Effective Date") and shall
expire at the end of the next annual general meeting of the Recipient Company
following the Effective Date.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders' Nomination Board of each of the Recipient Company and the Merging
Company, proposes to the Extraordinary General Meeting of the Recipient Company
resolving on the Merger that Peter Seligson, Elisabet Salander Björklund,
Sebastian Bondestam, Alexander Ehrnrooth, Hannele Jakosuo-Jansson, Mats
Lindstrand and Anna Ohlsson-Leijon, each a current member of the Board of
Directors of the Recipient Company, be conditionally elected to continue to
serve on the Board of Directors of the Recipient Company and that Hans
Sohlström, Jan Inborr, Johannes Gullichsen and Harri-Pekka Kaukonen, each a
current member of the Board of Directors of the Merging Company, be
conditionally elected as members of the Board of Directors of the Recipient
Company for the term commencing on the Effective Date and expiring on the end of
the next annual general meeting of the Recipient Company following the Effective
Date.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders' Nomination Boards of each of the Recipient Company and the Merging
Company, may amend the above-mentioned proposal concerning the election of
members of the Board of Directors of the Recipient Company, in case one or more
of the above-mentioned persons would not be available for election at the
Extraordinary General Meeting of the Recipient Company resolving on the Merger.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders' Nomination Boards of each of the Recipient Company and the Merging
Company, may as necessary convene a General Meeting of Shareholders after the
Extraordinary General Meeting of the Recipient Company resolving on the Merger
to resolve to supplement or amend the composition of the Board of Directors of
the Recipient Company prior to the Effective Date, for example in case an
elected member of the Board of Directors of the Recipient Company dies, resigns
or has to be replaced by another person for some other reason.
5 Merger Consideration in shares
The shareholders of the Merging Company shall receive as merger consideration
0.9738 new shares of the Recipient Company for each share owned in the Merging
Company (the "Merger Consideration"), that is, the Merger Consideration shall be
issued to the shareholders of the Merging Company in proportion to their
existing shareholding with a ratio of 0.9738:1. There is only one share class in
the Recipient Company, and the shares of the Recipient Company do not have a
nominal value.
In case the number of shares received by a shareholder of the Merging Company as
Merger Consideration would be a fractional number, the fractions shall be
rounded down to the nearest whole number. Fractional entitlements to new shares
of the Recipient Company shall be aggregated and sold in the market and the
proceeds shall be distributed pro rata to the Merging Company's shareholders
entitled to receive such fractional entitlements. Any costs related to the sale
and distribution of fractional entitlements shall be borne by the Recipient
Company.
The allocation of the Merger Consideration is based on the shareholding in the
Merging Company at the end of the last trading day preceding the Effective Date.
The final total number of shares in the Recipient Company issued as Merger
Consideration shall be determined on the basis of the number of shares in the
Merging Company held by shareholders, other than the Merging Company itself, on
the Effective Date. On the date of this Merger Plan, the Merging Company holds
72,752 treasury shares. Based on the situation on the date of this Merger Plan,
the total number of shares in the Recipient Company to be issued as Merger
Consideration would therefore be 45,376,992 shares.
6 Other consideration
Apart from the Merger Consideration to be issued in the form of new shares of
the Recipient Company and proceeds from the sale of fractional entitlements, all
as set forth in Section 5 above, no other consideration shall be distributed to
the shareholders of the Merging Company.
7 Distribution of the Merger Consideration, other terms and
conditions concerning the Merger Consideration and the grounds for the
determination of the Merger Consideration
The Merger Consideration shall be distributed to the shareholders of the Merging
Company on the Effective Date or as soon as reasonably possible thereafter.
The Merger Consideration shall be distributed in the book-entry securities
system maintained by Euroclear Finland Ltd. Th
Unternehmensinformation / Kurzprofil:
Datum: 07.11.2016 - 07:30 Uhr
Sprache: Deutsch
News-ID 505211
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contact information:
Town:
Helsinki
Kategorie:
Business News
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