ÅF acquires Benima from Teleca
- ÅF and Teleca have signed an agreement for a sale of Benima from Teleca to ÅF
- The purchase price amounts totally to SEK 525 M, comprising:
- SEK 400 M in cash
- SEK 125 M through an issue in kind to Teleca
- Significant synergies between ÅF and Benima
- The acquisition is expected to generate a positive effect on earnings per share for ÅF already in 2006, excluding synergy effects
- Benima, in combination with ÅF's resources in automation and industrial IT, will form a new division, ÅF-Benima, headed by Tore Helgeson, President of Benima.
- The Board of Directors aim to propose a new share issue with preferential rights for existing shareholders of approximately SEK 300 M in order to restore financial flexibility and creating preparedness for future acquisitions after the acquisitions of Ingemansson Technology, Enprima and now Benima
Reasons for the transaction
ÅF has a growth strategy and a vision of sales of not less than SEK 5 billion by 2010. The vision will be achieved through acquisitions and organic growth. Benima is a strategic acquisition that significantly strengthens ÅF within the core area of automation and industrial IT.
Benima in brief
Benima was formed in 1981 and is a leading technology consulting company in automation and industrial IT, with slightly more than 500 employees in eight companies at 32 offices in Sweden, Denmark, Finland and Norway. In 2005, Benima's sales amounted to SEK 496 M and operating profit before depreciation of intangible assets (EBITA) totalled SEK 41 M. In the period January-March 2006, Benima had sales of SEK 128.3 M, with operating profit before depreciation of intangible assets (EBITA) of SEK 17.2 M. Benima had 508 employees on 31 March 2006.
Teleca and ÅF have agreed that Teleca will sell all of its shares in Benima to ÅF for a total payment of SEK 525 M. ÅF will pay a cash amount of SEK 400 M and 782,840 shares issued in kind. Based on the average price over the ten trading days immediately preceding the signing of the transaction, SEK 159.675, the value of the newly issued shares totals SEK 125 M. The purchase price is based on Benima's balance sheet as of December 31, 2005. Changes in Benima's equity, during the period of January 1 to April 30, 2006, will adjust the purchase price. ÅF will consolidate Benima starting May 1, 2006.
Financing of the offer
The purchase price for the acquisition of Benima is financed through existing cash and bank facilities and an issue in kind, corresponding to about SEK 125 M. The issue in kind is covered by the authorisation that the Board received from the Annual General Meeting on April 27, 2006. SEK 485 M of the purchase price pertains to intangible assets, of which about SEK 450 M is expected to be classified as goodwill.
ÅF after the acquisition
Following the acquisition of Benima, ÅF will have approximately 3,500 employees with a strong Nordic and International presence. Pro forma sales in 2005, including Benima and the earlier acquisitions of Ingemansson Technology and Enprima, would have amounted to about SEK 3,150 M, with an operating profit (EBITA), excluding capital gains and potential pro forma synergies, of about SEK 170 M.
In combination with ÅF's automation unit, which is currently included in the ÅF Process division, Benima will form a new division, ÅF-Benima, which will be the leading player in automation and industrial IT in the Nordic region, with approximately 1,000 employees.
ÅF anticipates being able to generate annual synergies of approximately SEK 20 M as of 2007 as a result of the acquisition of Benima. The synergies comprise mainly cost-savings relating to joint premises in a number of locations, reduced administrative costs and lower IT costs. The stronger market position is also expected to contribute to positive revenue synergies. It is anticipated that the acquisition will have a positive effect on ÅF's earnings per share as early as 2006, excluding synergy effects.
New share issue with preferential rights
During 2006, ÅF has acquired Ingemansson Technology, Enprima and now Benima, with a total of more than 900 employees and overall sales of nearly SEK 900 M. With the aim of restoring ÅF's financial flexibility and creating preparedness for future acquisitions, ÅF's Board of Directors intends to propose an extra shareholders meeting a new share issue with preferential rights for existing shareholders of about SEK 300 M during 2006.
Comments to the transaction:
"It is with great satisfaction that we can present the acquisition of Benima" says Jonas Wiström, President of ÅF. "We have been competitors for a long time and have great respect for each other's expertise. It is very exciting that we will now be working together. We will add advanced expertise in industrial IT and automation, which will strengthen the offering to our customers, at the same time as we will take a major step forward in implementing our long-term growth strategy."
"ÅF's acquisition of Benima will increase our commercial opportunities because together with ÅF we'll be able to strengthen our position as the leading technical consultant within industrial IT and automation. Benima has always respected ÅF as a competitor and in and industry colleague, and we're looking forward to being able - together with ÅF's complementary services, for example in the process industry - to provide additional productivity- and value-increasing services to our customers," says Tore Helgeson, President of Benima.
"I believe there's a large industrial rationale for this deal," says Dan Olofsson, chairman of Teleca. "Benima's prospects for continued advancement will improve within ÅF - an environment where the synergies with other business activities are considerably higher."
Handelsbanken Capital Markets is the financial advisor to ÅF for this transaction.
Stockholm, May 8, 2006
"Innovation by experience"
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The ÅF Group is a leader in technical consulting, with expertise founded on more than a century of experience. We offer highly qualified services and solutions for industrial processes, infrastructure projects and the development of products and IT systems. We are also one of the leading names in certified third-party testing and inspection work.
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Today the ÅF Group has 3,500 employees. Our base is in Europe, but our business and our clients are found all over the world."