Swedish rolled aluminium firm Gränges AB announced on Thursday that it has come to an agreement to purchase its Polish counterpart Aluminium Konin from the Boryszew Group for SEK2.3 billion (US$240.8 million).
Per the firm, the deal is equal to an EV/EBITDA multiple of 6.9x LTM (Last Twelve Months) from September’s EBITDA. In addition to the purchase price, Gränges agreed to complete a three-year, SEK1.1-billion (US$115 million) expansion program that was first initiated by Boryszew Group. The expansion will boost Aluminium Konin’s capacity to 140 thousand metric tons per annum.
In order to finance the buy, Danske Bank, Nordea Bank, and Svenska Handelsbanken have agreed to provide a SEK2.3-billion bridge loan faculty featuring an 18-month time to maturity. Upon completion of the purchase and related new stock issues, Gränges estimates its new total net debt to total approximately SEK4.3 billion (US$450 million), or 2.6 times adjusted EBITDA.
Gränges’ CEO Johan Menckel noted the synergies achieved by its purchase of Aluminium Konin.
“Aluminium Konin contributes with technically advanced operations, strategically located in Central Europe. The acquisition is a good strategic fit and complements our business and geographic presence. Together we are creating a strong platform for product mix optimization and sustainable profitable growth. Aluminium Konin strengthens Gränges’ product offering for new niche markets and enables a broader offering of solutions for future vehicles. The acquisition will sharpen our competitive strength and create a stronger position in growing markets to further drive the development of sustainable customer offerings.”
Gränges’ single largest shareholder The Fourth Swedish National Pension Fund Senior Portfolio Manager Jannis Kitsakis elaborated upon the positives of the transaction.
“With an even stronger position in growing markets and a broader offering of solutions for future vehicles and other applications, Gränges will be able to further drive the development of sustainable customer offerings. With Gränges’ successful track record of acquisitions and ability to minimize environmental impact of its operations, we are confident that Gränges will continue to create long-term profitable growth. Since the listing of the share in 2014, Gränges has more than doubled its sales volume and profit and generated growth above industry average, driven by technically advanced products, innovation, successful acquisitions and a strong sustainability commitment.”
Begun in 1873 in Stockholm, Sweden as Trafik AB Grängesberg-Oxelösund, Gränges AB was resurrected in 2013 as a private company specializing in rolled aluminium heat exchangers. It employs almost 1,800 employees at the present time at two plants – one in Finspång, Sweden, that opened in its present configuration in 1972, and a second in Shanghai, China, opened in 1996. The firm boasts a total nameplate capacity of 420 thousand metric tons per annum and an annual sales total of SEK13 billion (US$1.35 billion).