Prospectus and certain other information published in relation to the merger of Ahlstrom and Munksjö
(Thomson Reuters ONE) -
This stock exchange release may not be published or distributed, in whole or in
part, directly or indirectly, in or into Canada, Australia, Hong Kong, South
Africa, Japan or any other country where such publication or distribution would
violate applicable laws or rules or would require additional documents to be
completed or registered or require any measure to be undertaken, in addition to
the requirements under Finnish law. For further information, see "Important
notice" below.
Ahlstrom Corporation STOCK EXCHANGE RELEASE December 16, 2016 at 12:00 noon
Prospectus and certain other information published in relation to the merger of
Ahlstrom and Munksjö
* Merger prospectus, including unaudited pro forma financial information,
published today
* Management team, effective as of the completion of the merger, appointed and
other governance topics related to the combined company published
* Certain other information published by Munksjö today
Overview
As announced on November 7, 2016, the Boards of Directors of Ahlstrom
Corporation ("Ahlstrom") and Munksjö Oyj ("Munksjö") have agreed on combining
the two companies through a statutory absorption merger whereby Ahlstrom would
be merged into Munksjö in such a manner that all assets and liabilities of
Ahlstrom would be transferred without a liquidation procedure to Munksjö (the
"Merger"). The shareholders of Ahlstrom would receive new shares in Munksjö as
merger consideration in proportion to their existing shareholdings. Further, as
announced on November 14, 2016, the Boards of Directors of Munksjö and Ahlstrom
have proposed that the extraordinary general meetings of shareholders of Munksjö
and Ahlstrom, both scheduled to be held on January 11, 2017, resolve on the
Merger.
Publication of the merger prospectus
The Finnish Financial Supervisory Authority has today approved the Finnish
language version of the prospectus prepared in relation to the Merger and for
the listing of the new shares in Munksjö to be issued as merger consideration.
The Finnish language prospectus will be available on the internet at
www.ahlstrom.com/fi/Sijoittajat/ahlstromin-ja-munksjon-yhdistyminen/ and
www.munksjo.com/ahlstrommunksjo/fin on or about December 16, 2016, as well as at
the reception of Nasdaq Helsinki Ltd at Fabianinkatu 14, FI-00100 Helsinki,
Finland, at the registered office of Ahlstrom at Alvar Aallon katu 3 C, FI-
00100 Helsinki, Finland and at the registered office of Munksjö at
Eteläesplanadi 14, FI-00130 Helsinki, Finland. The English language prospectus,
together with the Swedish language summary, will be available on the internet at
www.ahlstrom.com/en/Investors/ahlstrommunksjo-combination/ and
www.munksjo.com/ahlstrommunksjo starting on or about December 16, 2016.
The prospectus contains the following previously unpublished information in
relation to the Merger and Munksjö:
Management team and other governance topics related to the combined company
As previously communicated, Munksjö's current CEO, Jan Åström, will continue to
serve as the CEO of the combined company.
The business areas of the combined company will be led by an experienced team
combining the talent of both companies:
* The Decor business area will be led by Norbert Mix
* The Filtration and Performance business area will be led by Fulvio
Capussotti
* The Industrial Solutions business area will be led by Daniele Borlatto
* The Specialties business area will be led by Omar Hoek
The management of the combined company will also include an experienced team of
functional managers:
* Sakari Ahdekivi will serve as Deputy CEO and Executive Vice President
Corporate Development
* Pia Aaltonen-Forsell will serve as Chief Financial Officer
* Andreas Elving will serve as General Counsel
* Ã…sa Jackson will serve as Senior Vice President Human Resources
* Anna Selberg will serve as Senior Vice President Communications
The new management team of the combined company will become effective as of the
completion of the Merger.
It is currently proposed that, following the completion of the Merger, the
combined company will continue to have its administrative head office in
Stockholm, Sweden and supporting administrative functions in Helsinki, Finland.
Final decisions regarding the location of the administrative head office
functions will be taken as part of the integration process related to the
Merger. Munksjö and Ahlstrom will consult and negotiate with relevant employees,
their representatives and/or employee organisations regarding the consequences
of such decision in accordance with the applicable legal requirements.
Unaudited pro forma financial information
The unaudited pro forma financial information included in the prospectus is
attached as Annex 1 to this stock exchange release (any capitalized terms used
in unaudited pro forma financial information and not defined therein shall have
the meanings assigned to them in the prospectus).
Changes to Munksjö's long-term share-value based incentive program approved in
June 2016
Munksjö has today as part of its stock exchange release announcing the
publication of the prospectus published that the Board of Directors of Munksjö
has decided to terminate Munksjö's long-term share-value-based incentive program
for the members of the Management Team and other key personnel of Munksjö
approved in June 2016. The release is available at www.munksjo.com.
Munksjö will book items affecting comparability related to the Merger
Munksjö has today as part of its stock exchange release announcing the
publication of the prospectus published that it will book items affecting
comparability related to the Merger. The release is available at
www.munksjo.com.
For further information, please contact:
Sakari Ahdekivi
Interim President & CEO
Tel: + 358 10 888 4768
Satu Perälampi
Vice President, Communications
Tel. +358 10 888 4738
Juho Erkheikki
Investor Relations & Financial Communications Manager
Tel. +358 10 888 4731
Ahlstrom in brief
Ahlstrom provides innovative fiber-based materials with a function in everyday
life. We are committed to growing and creating stakeholder value by proving the
best performing sustainable fiber-based materials. Our 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. Our 3,300 employees serve
customers in 22 countries. Ahlstrom's share is quoted on the 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
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 have not been, and will not be, registered under 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 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 U.S. federal securities laws in respect of
the Merger, 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.
ANNEX 1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined financial information (the "Unaudited
Pro Forma Financial Information") is presented for illustrative purposes only to
give effect to the Merger and refinancing the existing indebtedness of Munksjö
(whether originally incurred by Munksjö or assumed by Munksjö as a result of the
Merger) under the New Financing Agreements (as defined below) on Munksjö's
financial information. The Unaudited Pro Forma Financial Information is prepared
on the basis of the historical results of Munksjö and Ahlstrom presented in
accordance with IFRS. For additional information on the historical results of
Munksjö or Ahlstrom, see the audited historical consolidated financial
information and the unaudited interim consolidated financial information of
Munksjö and Ahlstrom incorporated by reference into the Prospectus.
Merger of Munksjö and Ahlstrom
The Boards of Directors of Munksjö and Ahlstrom have, on November 14, 2016,
proposed that the EGMs of Munksjö and Ahlstrom scheduled to be held on
January 11, 2017 resolve on the Merger in accordance with the Merger Plan and
approve the Merger Plan. The completion of the Merger is subject to, inter alia,
approval by the respective EGMs of Munksjö and Ahlstrom, merger control
approvals from relevant competition authorities, the satisfaction or waiver of
the other conditions precedent in the Combination Agreement and the Merger Plan,
the Combination Agreement not having been terminated in accordance with its
terms and the registration of the completion of the Merger with the Finnish
Trade Register. For information on the conditions to the completion of the
Merger in the Combination Agreement and the Merger Plan, see "Merger of Munksjö
and Ahlstrom-Combination Agreement-Conditions to the Completion of the Merger"
in the Prospectus as well as the Merger Plan, which is attached to the
Prospectus as Annex E. On the Effective Date, Ahlstrom will automatically
dissolve.
The completion of the Merger is, among other things, conditional upon the sale
by Ahlstrom of its entire interest in the plant located at Osnabrück, Germany.
Ahlstrom announced on November 7, 2016 that it has signed an agreement to sell
its German subsidiary with operations in Osnabrück. Ahlstrom produces base
papers for wallcovers, poster papers as well as release liners for self-adhesive
labels at the Osnabrück plant, which is part of the Filtration & Performance
business area. The transaction will also include Ahlstrom's 50Â percent stake in
AK Energie GmbH (a joint venture with Kämmerer Paper Holding GmbH ("Kämmerer")),
which is the site's utility providing power and water treatment services.
The completion of the Merger is expected to be registered with the Finnish Trade
Register on or about April 1, 2017 (i.e., the Effective Date), provided that the
conditions to the completion of the Merger have been fulfilled.
New Financing Agreements
On November 7, 2016, Munksjö and Ahlstrom agreed on financing commitments for
the Merger and the Combined Company with Nordea and SEB as mandated lead
arrangers. In accordance with these commitments, Munksjö entered into a
facilities agreement with Nordea and SEB as mandated lead arrangers and
underwriters and Nordea as agent on November 10, 2016 (the "Term and Revolving
Facilities Agreement"), pursuant to which a term loan facility of
EURÂ 80Â million, a term loan facility of EURÂ 40Â million, a term loan facility of
EURÂ 150Â million, a term loan facility of SEKÂ 600Â million and a term loan
facility of USD 35Â million (together, the "Term Loan Facilities") as well as a
multicurrency revolving credit facility of EURÂ 200Â million (the "Revolving
Credit Facility," and together with the Term Loan Facilities, the "Term and
Revolving Facilities") will be made available to Munksjö.
On the same date, Ahlstrom entered into a EURÂ 200Â million bridge facility
agreement with Nordea and SEB as mandated lead arrangers and underwriters and
Nordea as agent (the "Bridge Facility Agreement"). Assuming that the Merger is
completed, the Bridge Facility Agreement will be assumed by Munksjö on the
Effective Date pursuant to an amended and restated bridge facility agreement
(the "Amended and Restated Bridge Facility Agreement," and together with the
Term and Revolving Facilities Agreement, the "New Financing Agreements") with
amended and restated terms and the commitments reduced to EURÂ 100Â million (the
"Amended and Restated Bridge Facility," and together with the Term Loan
Facilities and the Revolving Credit Facility, the "Facilities"). The Term and
Revolving Facilities Agreement and the Amended and Restated Bridge Facility
Agreement provide that the Facilities will be available to the Combined Company
on a certain funds basis subject to the completion of the Merger and certain
other customary conditions precedent.
The existing indebtedness that is expected to be refinanced under the Facilities
include, among others, indebtedness under Munksjö's EUR 345 million and
SEKÂ 570Â million term and revolving facilities agreement (as discussed under
"Information about Munksjö-Operating and Financial Review and Prospects of
Munksjö-Liquidity and Capital Resources-Borrowings" in the Prospectus),
Ahlstrom's EURÂ 180Â million multicurrency revolving credit facility agreement (as
discussed under "Information about Ahlstrom-Operating and Financial Review and
Prospects of Ahlstrom-Liquidity and Capital Resources-Liquidity" in the
Prospectus) and certain bilateral financing arrangements of Ahlstrom.
Basis of Presentation
The Merger will be accounted for as a business combination at consolidation
using the acquisition method of accounting under the provisions of IFRS 3 with
Munksjö determined as the acquirer of Ahlstrom. The acquisition method of
accounting in accordance with IFRSÂ 3 applies the fair value concepts defined in
"IFRS 13 - Fair Value Measurement," and requires, among other things, that the
identifiable assets acquired and liabilities assumed in a business combination
are recognized at their fair values as of the acquisition date, with any excess
of the purchase consideration over the fair value of identifiable net assets
acquired recognized as goodwill. The purchase price calculation presented herein
has been made solely for the purpose of preparing this Unaudited Pro Forma
Financial Information. The Unaudited Pro Forma Financial Information has been
prepared in accordance with the Annex II to the Commission Regulation (EU) N:o
809/2004, as amended, and on a basis consistent with IFRS as adopted by the EU
and with the accounting principles applied in Munksjö's audited consolidated
financial statements as at and for the year ended December 31, 2015. The
Unaudited Pro Forma Financial Information has not been compiled in accordance
with Article 11 of Regulation S-X under the Securities Act or the guidelines
established by the American Institute of Certified Public Accountants.
The Unaudited Pro Forma Financial Information has been derived from
(a) Munksjö's audited consolidated financial statements as at and for the year
ended December 31, 2015, (b) Munksjö's unaudited consolidated financial
information as at and for the nine months ended September 30, 2016,
(c)Â Ahlstrom's audited consolidated financial statements as at and for the year
ended December 31, 2015 and (d) Ahlstrom's unaudited consolidated financial
information as at and for the nine months ended September 30, 2016.
The unaudited pro forma combined statement of financial position as at
September 30, 2016 gives effect to the Merger and the refinancing under the New
Financing Agreements as if they had occurred on that date. The unaudited pro
forma combined income statements for the nine months ended September 30, 2016
and for the year ended December 31, 2015 give effect to the Merger and the
refinancing under the New Financing Agreements as if they had occurred on
January 1, 2015.
The Unaudited Pro Forma Financial Information reflects adjustments to historical
financial information to give pro forma effect to events that are directly
attributable to the Merger and to the refinancing under the New Financing
Agreements and which are factually supportable. The Unaudited Pro Forma
Financial Information and explanatory notes present how Munksjö's financial
statements may have appeared had the businesses actually been combined and had
Munksjö's capital structure reflected the Merger and the refinancing under the
New Financing Agreements on the dates noted above.
Munksjö has performed a preliminary review of Ahlstrom's IFRS accounting
policies, based primarily on publicly available information, to determine
whether any adjustments were necessary to ensure comparability in the Unaudited
Pro Forma Financial Information. At this time, Munksjö has identified two
differences which are further described in Note 1 to the Unaudited Pro Forma
Financial Information below. Upon the completion of the Merger, Munksjö will
conduct a detailed review of Ahlstrom's accounting policies. Further, certain
reclassifications were made to amounts in Ahlstrom's financial statements to
align with Munksjö's presentation as described further in Note 1 to the
Unaudited Pro Forma Financial Information below.
The Unaudited Pro Forma Financial Information assumes that all shares in
Ahlstrom will be exchanged to shares in Munksjö applying the Merger
Consideration (excluding treasury shares held by Ahlstrom) and that none of
Ahlstrom's shareholders have demanded their shares in Ahlstrom to be redeemed in
cash.
The Unaudited Pro Forma Financial Information reflects the application of pro
forma adjustments that are preliminary and are based upon available information
and certain assumptions described in the accompanying notes to the Unaudited Pro
Forma Financial Information below and that Munksjö believes are reasonable under
the circumstances. Actual results of the Merger may materially differ from the
assumptions used in the Unaudited Pro Forma Financial Information. The Unaudited
Pro Forma Financial Information has been prepared by Munksjö for illustrative
purposes only and it reflects the assumed circumstances, and is not necessarily
indicative of the actual financial position or results of operations of Munksjö
that would have been realized had the Merger and the refinancing under the New
Financing Agreements occurred as at the dates indicated, nor is it meant to be
indicative of any anticipated financial position or future results of operations
that Munksjö will experience going forward. In addition, the unaudited pro forma
combined income statements do not reflect any expected cost savings or synergy
benefits that are expected to be generated or incurred.
All amounts presented are in millions of euros unless otherwise noted. The
Unaudited Pro Forma Financial Information set forth herein has been rounded.
Accordingly, in certain instances, the sum of the numbers in a column or row may
not conform exactly to the total amount given for that column or row.
Unaudited Pro Forma Combined Statement of Financial Position as at
September 30, 2016
The following table sets forth the unaudited pro forma combined statement of
financial position as at September 30, 2016:
 As at September 30, 2016
New Combined
Munksjö Ahlstrom Financing Company
 historical reclassified Merger Agreements pro forma
  (Note 1) (Note 2) (Note 3)
 (EUR in millions)
Assets
Non-current
assets
Tangible assets 416.1 312.7 130.5 - 859.3
Goodwill 225.5 72.2 275.5 - 573.2
Other 43.5 10.7 221.3 - 275.5
intangible
assets
Equity 2.2 15.7 (15.7) - 2.2
accounted
investments
Other non- 3.2 8.1 (0.5) 1.9 12.7
current assets
Deferred tax  48.3  66.6  (9.1)  -  105.8
assets
Total non- 738.8 486.0 601.9 1.9 1,828.6
current assets
Current assets
Inventory 156.0 123.2 (8.3) - 270.9
Accounts 115.9 111.7 (7.1) - 220.6
receivable
Other current 30.4 31.7 (3.0) - 59.0
assets
Current tax 1.2 1.3 - - 2.5
asset
Cash and cash  116.2  54.5  (62.6)  19.0  127.0
equivalents
Total current  419.7 322.4  (81.1)  19.0  680.0
assets
Total assets 1,158.5 808.4 Â 520.8 Â 21.0 2,508.6
Equity and
liabilities
Equity
Attributable to
parent
company's
shareholders
Share capital 15.0 70.0 - - 85.0
Reserve for 254.1 - 428.6 - 682.7
unrestricted
equity
Other reserves 370.9 41.2 (41.2) - 370.9
Retained  (219.1)  91.8  55.9  (3.5)  (74.9)
earnings
Hybrid bond  - 100.0 (100.0)  -  -
Total equity
attributable to
parent
company's
shareholders 420.9 303.0 343.3 (3.5) 1,063.7
Non-controlling 4.0 4.6 - - 8.7
interests
Total equity 424.9 307.6 343.3 (3.5) 1,072.4
Non-current
liabilities
Non-current 293.6 100.3 109.9 67.2 571.0
borrowings
Other non- 3.1 0.0 - - 3.1
current
liabilities
Pension 51.7 99.5 (33.3) - 117.8
obligations
Deferred tax 74.4 2.1 94.0 - 170.6
liabilities
Provisions  17.7  0.4  -  -  18.2
Total non- 440.5 202.4 170.6 67.2 880.6
current
liabilities
Current
liabilities
Current 22.4 84.6 (0.2) (43.7) 63.1
borrowings
Accounts 141.2 139.8 0.3 1.0 282.3
payable
Liabilities to 5.9 - - - 5.9
equity
accounted
investments
Accrued 103.6 44.1 7.0 - 154.8
expenses and
deferred income
Current tax 8.0 7.2 0.0 - 15.2
liabilities
Other current  12.0  22.7  (0.4) -  34.4
liabilities
Total current  293.1 298.4  6.9 (42.7)  555.6
liabilities
Total  733.6 500.8  177.5  24.5 1,436.2
liabilities
Total equity 1,158.5 808.4 Â 520.8 Â 21.0 2,508.6
and liabilities
Refer to accompanying notes to the Unaudited Pro Forma Financial Information
Unaudited Pro Forma Combined Income Statement for the Nine Months Ended
September 30, 2016
The following table sets forth the unaudited pro forma combined income statement
for the nine months ended September 30, 2016:
 For the nine months ended September 30, 2016
New Combined
Munksjö Ahlstrom Financing Company pro
 historical reclassified Merger Agreements forma
  (Note 1) (Note 2) (Note 3)
 (EUR in millions, unless otherwise indicated)
Net sales 860.5 819.8 (59.9) - 1,620.4
Other operating  5.5  (0.1)  -  10.7
income  5.3
Total income 865.8 825.3 (60.0) - 1,631.1
Changes in 1.9 0.1 - 4.0
inventories 2.1
Materials and (368.1) 33.4 - (746.2)
supplies (411.5)
Other external (194.3) 26.5 - (367.2)
costs (199.5)
Personnel costs (156.3) (163.6) 3.4 - (316.5)
Depreciation (38.3) (23.1) - (103.5)
and
amortization (42.1)
Share of profit  0.2  (0.2)  -  -
in equity
accounted
investments   -
Operating 63.0 (19.9) - 101.7
result 58.5
Financial 0.3 (0.1) - 4.3
income 4.0
Financial costs  (18.2)  (11.9)  0.7 (0.9)  (30.3)
Net financial  (11.6)  0.7 (0.9)  (26.0)
items  (14.2)
Profit/(loss) Â 51.4 (19.2) (0.9) Â 75.7
before tax 44.3
Taxes  (12.8)  (18.0)  6.2  0.2  (24.4)
Net result for  33.5 (13.0) (0.7)  51.2
the period  31.5
Net result
attributable
to:
Parent 33.4 (13.0) (0.7) 51.0
company's
shareholders 31.3
Non-controlling 0.0 - - 0.3
interests 0.2
Earnings per
share
(attributable
to parent
company's
shareholders)
Basic earnings 0.53
per share, EUR 0.62
Diluted 0.53
earnings per
share, EUR 0.62
Average number
of shares
Basic 50,761,581 Â Â Â 96,138,573
Diluted 50,878,354 Â Â Â 96,255,346
Refer to accompanying notes to the Unaudited Pro Forma Financial Information
Unaudited Pro Forma Combined Income Statement for the Year Ended
December 31, 2015
The following table sets forth the unaudited pro forma combined income statement
for the year ended December 31, 2015:
 For the year ended December 31, 2015
New Combined
Munksjö Ahlstrom Financing Company pro
 historical reclassified Merger Agreements forma
  (Note 1) (Note 2) (Note 3)
 (EUR in millions, unless otherwise indicated)
Net sales 1,130.7 1,074.7 (80.8) - 2,124.6
Other operating  11.6  4.4  3.8 -  19.8
income
Total income 1,142.3 1,079.1 (76.9) - 2,144.4
Changes in 1.0 5.2 (4.3) - 2.0
inventories
Materials and (573.9) (495.2) 48.2 - (1,020.8)
supplies
Other external (283.6) (276.0) 21.1 - (538.6)
costs
Personnel costs (199.5) (216.6) 4.4 - (411.8)
Depreciation (53.6) (74.6) (22.5) - (150.6)
and
amortization
Share of profit  0.0  0.2  (0.2) -  0.0
in equity
accounted
investments
Operating 32.7 22.1 (30.1) - 24.6
result
Financial 10.5 0.5 (0.0) - 11.0
income
Financial costs  (15.2)  0.1  0.9 (5.2)  (19.4)
Net financial  (4.7)  0.6  0.9 (5.2)  (8.5)
items
Profit/(loss) Â 28.0 Â 22.6 (29.3) (5.2) Â 16.2
before tax
Taxes  (5.2)  (14.1)  4.4  1.0  (13.8)
Net result for  22.8  8.6 (24.8) (4.2)  2.4
the period
Net result
attributable
to:
Parent 22.4 9.2 (24.8) (4.2) 2.6
company's
shareholders
Non-controlling 0.4 (0.7) - - (0.2)
interests
Earnings per
share
(attributable
to parent
company's
shareholders)
Basic earnings 0.44 Â Â Â 0.03
per share, EUR
Diluted 0.44 Â Â Â 0.03
earnings per
share, EUR
Average number
of shares
Basic 50,818,260 Â Â Â 96,195,252
Diluted 50,918,311 Â Â Â 96,295,303
Refer to accompanying notes to the Unaudited Pro Forma Financial Information
Notes to the Unaudited Pro Forma Financial Information
(1)      Alignment of Ahlstrom's Financial Information with Munksjö's
Accounting Principles and Presentation
Accounting Policy Alignment
Munksjö has performed a preliminary review of Ahlstrom's accounting policies,
based primarily on publicly available information, to determine whether any
adjustments were necessary to ensure comparability in the Unaudited Pro Forma
Financial Information. Munksjö has identified two differences, one relating to
the accounting for government grants and another relating to the accounting for
emission rights.
According to Munksjö's accounting policies, grants related to expense items are
recognized in the consolidated statement of comprehensive income to adjust those
expenses that the grants are intended to offset. According to Ahlstrom's
accounting policies, grants received as reimbursement of expenses are recognized
in other operating income. Thus, in the Unaudited Pro Forma Financial
Information, the government grants have been adjusted in accordance with
Munksjö's accounting policies as presented in "-Reclassification of Ahlstrom's
Historical Financial Information" below.
According to Munksjö's accounting policies, emission rights are initially
recorded at fair value when the group obtains control and are subsequently
measured at cost on a FIFO (first-in-first-out) basis. According to Ahlstrom's
accounting policies, the allocated emission allowances received free of charge
and the liability based on the actual emissions are netted. No intangible asset
is recognized for the excess of allowances. Thus, Ahlstrom's net assets as at
September 30, 2016 have been adjusted with the fair value of the emission
allowances in excess in Note 2 below.
Upon the completion of the Merger, Munksjö will conduct a detailed review of
Ahlstrom's accounting policies. As a result of that review, Munksjö may identify
additional accounting policy differences between the two companies that, when
conformed, could have further impact on the combined financial statements. Based
on the information available at this time, Munksjö is not aware of any other
accounting policy differences that could have a material impact on the Unaudited
Pro Forma Financial Information.
Reclassification of Ahlstrom's Historical Financial Information
Certain reclassifications were made to align Ahlstrom's historical financial
information with Munksjö's financial statement presentation. Upon the completion
of the Merger, Munksjö will conduct a detailed review of Ahlstrom's financial
statement presentation. As a result of that review, Munksjö may identify
additional presentation differences between the two companies that, when
conformed, could have further impact on the presentation of the combined
financial statements. Based on the information available at this time, Munksjö
is not aware of any other presentation differences that could have a material
impact on the Unaudited Pro Forma Financial Information.
The following table sets forth the reclassifications that were made to align
Ahlstrom's historical statement of financial position as at September 30, 2016
with Munksjö's financial statement presentation:
 As at September 30, 2016
Historical Reclassi- Ahlstrom
 Ahlstrom fications Note reclassified
 (EUR in millions)
Non-current
assets
Other non-current - 8.1 (i), (ii) 8.1
assets
Other receivables 7.8 (7.8) (i) -
Other investments 0.3 (0.3) (ii) -
Current assets
Accounts - 111.7 (iii) 111.7
receivable
Other current - 31.7 (iii) 31.7
assets
Trade and other 143.4 (143.4) (iii) -
receivables
Current
liabilities
Accounts payable - 139.8 (iv) 139.8
Accrued expenses - 44.1 (iv) 44.1
and deferred
income
Other current - 22.7 (iv), (v) 22.7
liabilities
Trade and other 201.4 (201.4) (iv) -
payables
Provisions 5.1 (5.1) (v) -
___________
(i)Â Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 7.8Â million from other receivables to
other non-current assets.
(ii)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 0.3Â million from other investments to
other non-current assets.
(iii)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 143.4Â million from trade and other
receivables to accounts receivable (EURÂ 111.7Â million) and other current assets
(EURÂ 31.7Â million).
(iv)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 201.4Â million from trade and other
payables to accounts payable (EURÂ 139.8Â million), accrued expenses and deferred
income (EURÂ 44.1Â million) and other current liabilities (EURÂ 17.5Â million).
(v)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 5.1Â million from provisions to other
current liabilities.
The following table sets forth the accounting policy alignments and
reclassifications that were made to align Ahlstrom's historical income statement
presentation with expense classification based on function for the nine months
ended September 30, 2016 with Munksjö's financial statement presentation with
expense classification based on nature:
 For the nine months ended September 30, 2016
Accounting
Historical Reclassi- policy Ahlstrom
 Ahlstrom fications alignment Note reclassified
 (EUR in millions)
Other operating
income 7.4 - (1.9) (i) 5.5
Changes in
inventories - 1.9 Â - (ii) 1.9
Materials and
supplies - (368.1) Â - (ii) (368.1)
Other external - (196.1) 1.9 (i), (194.3)
costs (ii),
(iii),
(iv),
(v),
(vi)
Personnel costs - (163.6) Â - (ii), (163.6)
(iii),
(iv),
(v)
Depreciation and - (38.3) Â - (ii), (38.3)
amortization (iii),
(iv),
(v),
(vi)
Cost of goods
sold (663.3) 663.3 Â - (ii) -
Sales and
marketing
expenses (28.8) 28.8 Â - (iii) -
R&D expenses (12.4) 12.4 Â - (iv) -
Administrative
expenses (55.8) 55.8 Â - (v) -
Other operating
expenses (3.9) 3.9 - (vi) -
___________
(i)Â Â Â Â Â Â Â Â Â Â Â Adjustment of income relating to government grants received of
EURÂ 1.9Â million from other operating income to a deduction of other external
costs to align Ahlstrom's accounting policy with Munksjö's accounting policy.
(ii)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 663.3Â million from cost of goods sold to
materials and supplies (EURÂ 368.1Â million), other external costs
(EURÂ 153.6Â million), personnel costs (EURÂ 108.7Â million), depreciation and
amortization (EURÂ 34.6Â million) and changes in inventories (EURÂ 1.9Â million).
(iii)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 28.8Â million from sales and marketing
expenses to personnel costs (EURÂ 21.1Â million), other external costs
(EURÂ 7.7Â million) and depreciation and amortization (EURÂ 0.1Â million).
(iv)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 12.4Â million from R&D expenses to
personnel costs (EURÂ 8.3Â million), other external costs (EURÂ 2.9Â million) and
depreciation and amortization (EURÂ 1.1Â million).
(v)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 55.8Â million from administrative expenses
to other external costs (EURÂ 28.4Â million), personnel costs (EURÂ 25.4Â million)
and depreciation and amortization (EURÂ 1.9Â million).
(vi)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 3.9Â million from other operating expenses
to other external costs (EURÂ 3.5Â million) and depreciation and amortization
(EURÂ 0.5Â million).
The following table sets forth the reclassifications that were made to align
Ahlstrom's historical income statement presentation with expense classification
based on function for the year ended December 31, 2015 with Munksjö's financial
statement presentation with expense classification based on nature:
 For the year ended December 31, 2015
Accounting
Historical Reclassi- policy Ahlstrom
 Ahlstrom fications alignment Note reclassified
 (EUR in millions)
Other operating 7.0 Â - (2.6) (i) 4.4
income
Changes in - 5.2 - (ii) 5.2
inventories
Materials and - (495.2) - (ii) (495.2)
supplies
Other external - (278.6) 2.6 (i), (276.0)
costs (ii),
(iii),
(iv),
(v),
(vi)
Personnel costs - (216.6) - (ii), (216.6)
(iii),
(iv),
(v)
Depreciation and - (74.6) - (ii), (74.6)
amortization (iii),
(iv),
(v),
(vi)
Cost of goods (910.0) 910.0 - (ii) -
sold
Sales and (40.2) 40.2 - (iii) -
marketing
expenses
R&D expenses (20.9) 20.9 - (iv) -
Administrative (76.4) 76.4 - (v) -
expenses
Other operating (12.4) 12.4 - (vi) -
expenses
____________
(i)Â Â Â Â Â Â Â Â Â Â Â Adjustment of income relating to government grants received of
EURÂ 2.6Â million from other operating income to a deduction of other external
costs to align Ahlstrom's accounting policy with Munksjö's accounting policy.
(ii)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 910.0Â million from cost of goods sold to
materials and supplies (EURÂ 495.2Â million), other external costs
(EURÂ 214.0Â million), personnel costs (EURÂ 144.0Â million), depreciation and
amortization (EURÂ 61.9Â million) and changes in inventories (EURÂ 5.2Â million).
(iii)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 40.2Â million from sales and marketing
expenses to personnel costs (EURÂ 28.1Â million), other external costs
(EURÂ 11.6Â million) and depreciation and amortization (EURÂ 0.4Â million).
(iv)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 20.9Â million from R&D expenses to
personnel costs (EURÂ 11.8Â million), other external costs (EURÂ 7.5Â million) and
depreciation and amortization (EURÂ 1.5Â million).
(v)Â Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 76.4Â million from administrative expenses
to other external costs (EURÂ 40.6Â million), personnel costs (EURÂ 32.7Â million)
and depreciation and amortization (EURÂ 3.2Â million).
(vi)Â Â Â Â Â Â Â Â Â Reclassification of EURÂ 12.4Â million from other operating expenses
to depreciation and amortization (EURÂ 7.5Â million) and other external costs
(EURÂ 4.9Â million).
In addition to the accounting policy alignments and reclassifications presented
above for both the nine months ended September 30, 2016 and for the year ended
December 31, 2015, it should be noted that Ahlstrom has historically presented
share of profits of equity accounted investments below operating result
(EURÂ 0.2Â million for the nine months ended September 30, 2016 and for the year
ended December 31, 2015), whereas Munksjö includes share of profits in equity
accounted investments within operating result. Ahlstrom's presentation has been
aligned with Munksjö's presentation in this regard.
(2) Â Â Â Â Â Â Merger
The following table sets forth the pro forma adjustments that give effect to the
Merger on the unaudited pro forma combined statement of financial position as at
September 30, 2016 (the adjustments have been separated into different sections
based on the nature of the adjustment as described below under each section in
the respective notes):
 As at September 30, 2016
Acquisition -
Purchase
price
allocation to Merger
acquired impact to
assets and parent The
Fund assumed company Transaction Merger
 distributions liabilities equity costs in total
 (Notes 2a and (Note 2c) (Note 2d) (Note 2)
(Note 2a) 2b)
 (EUR in millions)
Assets
Non-current
assets
Tangible - 130.5 - - 130.5
assets
Goodwill - 275.5 - - 275.5
Other - 221.3 - - 221.3
intangible
assets
Equity - (15.7) - - (15.7)
accounted
investments
Other non- - (0.5) - - (0.5)
current assets
Deferred tax  -  (9.4)  -  0.3  (9.1)
assets
Total non- - 601.6 - 0.3 601.9
current assets
Current assets
Inventory - (8.3) - - (8.3)
Accounts - (7.1) - - (7.1)
receivable
Other current - (2.7) - (0.3) (3.0)
assets
Current tax - - - - -
asset
Cash and cash (22.8) Â (39.8) Â - Â - Â (62.6)
equivalents
Total current (22.8) Â (57.9) Â - Â (0.3) Â (81.1)
assets
Total assets (22.8) 543.7 Â - Â (0.1) 520.8
Equity and
liabilities
Equity
Attributable
to parent
company's
shareholders
Share capital - (70.0) 70.0 - -
Reserve for (22.8) 684.7 (232.2) (1.1) 428.6
unrestricted
equity
Other reserves - (41.2) - - (41.2)
Retained - (91.8) 162.2 (14.5) 55.9
earnings
Hybrid bond  - (100.0)  -  - (100.0)
Total equity
attributable
to parent
company's
shareholders (22.8) 381.8 - (15.6) 343.3
Non- Â - Â - Â - Â - Â -
controlling
interests
Total equity (22.8) 381.8 - (15.6) 343.3
Non-current
liabilities
Non-current - 109.9 - - 109.9
borrowings
Other non- - - - - -
current
liabilities
Pension - (33.3) - - (33.3)
obligations
Deferred tax - 94.0 - - 94.0
liabilities
Provisions  -  -  -  -  -
Total non- - 170.6 - - 170.6
current
liabilities
Current
liabilities
Current - (0.2) - - (0.2)
borrowings
Accounts - (15.2) - 15.5 0.3
payable
Accrued
expenses and
deferred
income - 7.0 - - 7.0
Current tax - 0.0 - - 0.0
liabilities
Other current  -  (0.4)  -  -  (0.4)
liabilities
Total current  -  (8.7)  -  15.5  6.9
liabilities
Total  -  161.9  -  15.5 177.5
liabilities
Total equity (22.8) Â 543.7 Â - Â (0.1) 520.8
and
liabilities
__________
(2a) Â Â Â Â Â Â Â Fund Distributions
The Boards of Directors of Munksjö and Ahlstrom have proposed to their
respective EGMs the authorization 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 Merger 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.
This distribution of funds for Munksjö has been reflected in the unaudited pro
forma combined statement of financial position by deducting EURÂ 22.8Â million
from the reserve for unrestricted equity and EURÂ 22.8Â million from cash and cash
equivalents. Ahlstrom's dividend payment will take place prior to the Effective
Date and as such, will decrease the acquired assets of Ahlstrom at the
acquisition date and is reflected in the adjustment 2b below for the assets
acquired and liabilities assumed in the acquisition.
(2b) Â Â Â Â Â Â Â Acquisition - Purchase Price Allocation to Acquired Assets and
Assumed Liabilities
The Merger will be accounted using the acquisition method of accounting where
Munksjö acquires Ahlstrom. Under the acquisition method of accounting, purchase
consideration is allocated to assets acquired and liabilities assumed based on
their estimated fair values as of the acquisition date. The excess of the
estimated preliminary purchase consideration over the estimated fair value of
the identifiable net assets acquired has been allocated to goodwill in this
Unaudited Pro Forma Financial Information.
Preliminary Estimate of the Fair Value of the Purchase Consideration
The purchase consideration is determined based on the fair value of the Merger
Consideration Shares. The aggregate number of the Merger Consideration Shares is
expected to be 45,376,992Â shares (excluding treasury shares held by Ahlstrom and
assuming that none of Ahlstrom's shareholders demand at the EGM of Ahlstrom
resolving on the Merger that their shares in Ahlstrom be redeemed) with an
aggregate fair value of EUR 684.7 million based on the November 10, 2016 closing
price of EUR 15.09 of the Munksjö share on Nasdaq Helsinki, corresponding to the
preliminary estimate of the purchase consideration as if the acquisition
occurred on September 30, 2016. Ahlstrom's shareholders will receive as Merger
Consideration 0.9738Â Merger Consideration Shares for each share in Ahlstrom
owned by them.
The preliminary estimate of the purchase consideration reflected in the
Unaudited Pro Forma Financial Information does not purport to represent the
actual consideration to
Unternehmensinformation / Kurzprofil:
Datum: 16.12.2016 - 11:00 Uhr
Sprache: Deutsch
News-ID 513371
Anzahl Zeichen: 65669
contact information:
Town:
Helsinki
Kategorie:
Business News
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"Prospectus and certain other information published in relation to the merger of Ahlstrom and Munksjö"
steht unter der journalistisch-redaktionellen Verantwortung von
Ahlstrom Oyj (Nachricht senden)
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