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Press release

Press release

ÅF Group takes over CTS Engineering Oy

The ÅF Group has acquired CTS Engineering Oy, one of Finland's largest engineering consultancies for the pulp and paper industry with 260 employees. The acquisition consolidates the position of the ÅF Group's Pulp & Paper Division as one of the two pre-eminent consulting companies for the European forest industry.
The forest industry consultant CTS reported turnover for 2003 in excess of 16 million euros. The company works on consulting assignments in Finland and throughout most of Europe. Established in 1973, CTS now has names such as Norske Skog, Stora Enso, UPM Kymmene and Metso among its portfolio of clients.
CTS's strengths in printing-paper technology provide the ideal complement to the ÅF Group's traditional focus on pulp production and waste paper.  
"CTS is set to play an important role in the international organisation that the ÅF Group's Pulp & Paper Division is in the process of creating," comments Jonas Wiström, President and CEO of the ÅF Group. "Together with CTS we now form a one-stop consulting resource for the pulp and paper industry that is able to call upon the skills and experience of 650 consultants in around a dozen countries. The acquisition of CTS will enable us to tackle even larger projects in the future at the same time as it provides us with a springboard for growth in and around the Baltic region."
The takeover will make the ÅF Group an all-round international supplier of consulting services for the pulp and paper industry, with units in Sweden, Finland, France, Germany, Spain, the Czech Republic and South Africa.
The ÅF Group will acquire 67.6 per cent of the shares in CTS, with an option on a further 12.4 per cent during 2005. As the ÅF Group already has a 20 per cent stake in CTS, this means that it will own 100 per cent of the shares by 2005 at the latest. The new shares will be transferred from the 27 shareholders in CTS, the majority of whom are actively employed in the company.
The transfer of the 67.6 per cent stake in CTS will be settled partly by a cash payment totalling SEK 34 million, and partly in the form of a new issue of "B" class shares in AB Ångpanneföreningen with a nominal value of SEK 23 million.
Part-payment in the form of a new share issue is effected with the support of the authority to do so invested in the board by the Annual General Meeting of ÅF shareholders on 7 May 2003. After the takeover the sellers will own 3.1 percent of the capital and 1.9 percent of the voting rights in ÅF.
It is anticipated that the merger will give rise to substantial synergies in earnings. According to preliminary estimates the cost for achieving these synergies, including transaction costs, will total approximately SEK 6 million. Overall the acquisition is expected to contribute positively to ÅF's profitability and cash flow during the course of the coming year.
Timo Juvonen, Managing Director of CTS, says. "Our merger with the ÅF Group improves our opportunities for growth and is the right move from an industrial point of view. It brings us into line with the globalisation of the pulp and paper industry and enables us to offer clients a broad spectrum of world-class services."
Financial trends for CTS Engineering Oy 1999-2003
5-year average
(millions of euros)
Profit margin
AB Ångpanneföreningen
Corporate Information

The ÅF Group is a leading name in technical consulting. We provide cutting-edge expertise in IT and engineering to serve the needs of clients working with energy and the environment, the pulp and paper industry, inspections, the development of industrial systems and products, the design of installations and infrastructure technology. The Group currently employs 2,600 people in around 50 locations throughout Sweden and almost a dozen other European countries.