Final Agreement Between AssiDoman and Frantschach.Business EditorsSTOCKHOLM, Sweden--(BUSINESS WIRE)--May 16, 2000 AssiDoman AB and Frantschach AG have signed an agreement on the sale of AssiDoman's sack operations, the Sepap and Dynas paper mills, and the Barrier Coating business unit. Frantschach will take over these operations with effect from 1 January 2000. The deal is subject to approval by the EU competition authorities and is expected to be finalised by payment of the purchase price in the second half of this year. The total purchase price is between MEUR MEUR Million Euros 550 (MSEK MSEK Meyer, Suozzi, English & Klein (New York law firm) MSEK Million Swedish Kroner 4,543) and MEUR 565 (MSEK 4,660) before deduction for interest-bearing liabilities, depending on the earnings trend in the sold units (earn out). The deal itself is expected to have an impact on profit after net financial items of approximately MSEK 180. In addition, positive tax effects of approximately MSEK 485 are expected, among other things due to previous losses. Taken together, the positive effect on the profit in 2000 will be approximately MSEK 665, corresponding to SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 5.60 per share. Since the transfer will be made with effect from 1 January 2000, the sold units' 2000 earnings will accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. to the purchaser. Until this transaction is completed, the sold units will be included in AssiDoman's accounts as previously. "This agreement marks a major step in the implementation of our strategy to concentrate operations and focus on those segments where AssiDoman has a competitive structure and is able to build up and defend a leading position and create shareholder value," says Gunnar Palme Pal·me , Olaf 1927-1986. Swedish politician. As premier (1969-1976 and 1982-1986) he was widely respected for his efforts toward peace and disarmament. Palme was assassinated in 1986. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AssiDoman. The Group's capital structure AssiDoman conducts regular reviews of the Group's capital structure in order to have a well-balanced balance sheet. The intention is to transfer most of the proceeds from the sale to Frantschach to shareholders in autumn 2000, once the deal has been completed and payment received. The transfer lies within the limits of what is judged possible in view of limitations in AssiDoman's balance sheet as regards available unrestricted equity, and reasonable in view of development plans for the remaining units. Advisors to AssiDoman in this deal have been Landsdowne Capital and Carnegie. AssiDoman is one of Europe's leading forest products companies with 17,000 employees and an annual turnover of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 3 billion. Production is concentrated on packaging paper, packaging and sawn timber products. AssiDoman AB Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. 16 May 2000 Appendix 1 AssiDoman's future direction Appendix 2 Financial facts for units being sold Appendix 3 Facts about the units included in the deal Appendix 1 AssiDoman's future direction AssiDoman's industrial operations will be focused on profitability and growth within Corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. & Containerboard con·tain·er·board n. A corrugated or solid cardboard used to make containers. (corrugated board Noun 1. corrugated board - cardboard with corrugations (can be glued to flat cardboard on one or both sides) corrugated cardboard cardboard, composition board - a stiff moderately thick paper and containerboard). As the third largest supplier of corrugated board and containerboard in Europe, AssiDoman has a strong position with excellent opportunities to further strengthen its position. Market share is currently just over six per cent and the aim is to exceed ten per cent. The strategy is to grow and strengthen positions in selected markets and to raise market share in profitable segments with a high value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. . AssiDoman needs to improve the balance between recycled-fibre based and virgin-fibre based paper and to increase the integration between containerboard and corrugated board. The necessary growth within Corrugated & Containerboard will take place organically or through acquisitions. The pulp and paper mills Karlsborg and Skarblacka have strong positions, among other things, in white, high-grade packaging paper. Opportunities for product and market development are good and there are several development options with regard to both grades and market segments. AssiDoman is open to co-operation with other companies in order to further strengthen competitiveness. AssiDoman Timber is Sweden's largest producer of sawn timber. The sawmill sawmill, installation or facility in which cut logs are sawed into standard-sized boards and timbers. The saws used in such an installation are generally of three types: the circular saw, which consists of a disk with teeth around its edge; the band saw, which industry has been suffering from a fragmented frag·ment n. 1. A small part broken off or detached. 2. An incomplete or isolated portion; a bit: overheard fragments of their conversation; extant fragments of an old manuscript. 3. structure and overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. for many years. Profitability is unsatisfactory and there is an urgent need for consolidation. In addition to further work with profitability and efficiency, AssiDoman also intends to play an active role in efforts to build stronger structures in this sector. AssiDoman's forest assets are a resource with significant cash flows and large values that must be better reflected in valuations of the company. The Group is currently assessing the advantages and disadvantages of keeping the forestry and industrial organisations together in the same structure, or whether a separate listed industrial company and pure-play forest company respectively can provide greater shareholder value. The evaluation of AssiDoman's future structure includes an analysis of an appropriate future capital structure and financial targets. The sale of business unit Cartonboard was initiated at the end of 1999. The sales process A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, achieving standardized customer interaction in sales and scalable revenue generation. is expected to be finalised before summer.
Appendix 2
Units being sold
Profit and Loss Account Of which Barrier
Coating, Sacks,
AssiDoman Dynas, Sepap
Group % of
January-March 2000 MSEK MSEK Total Group
External sales 6 560 1 546 24
Operating expenses -5 426 -1 302 24
Depreciation -446 -99 22
Operating profit 688 145 21
January-March 1999
External sales 5 947 1 326 22
Operating expenses -5 141 -1 199 23
Depreciation -501 -121 24
Operating profit 305 6 2
Full year 1999
External sales 24 497 5 502 22
Operating expenses -21 195 -4 994 24
Depreciation -1 963 -472 24
Operating profit 1 339 36 3
Full year 1998
External sales 23 993 5 756 24
Operating expenses -20 565 -5 237 25
Depreciation -1 850 -443 24
Operating profit 1 578 76 5
Full year 1997
External sales 20 725 5 649 27
Operating expenses -17 359 -5 210 30
Depreciation -1 521 -406 27
Operating profit 1 845 33 2
Assets and Liabilities Of which Barrier
Coating, Sacks,
AssiDoman Dynas, Sepap
Group % of
31 March 2000 MSEK MSEK Total Group
Fixed assets, non-interest- 20 452 3 716 18
bearing
Stocks 2 859 711 25
Non-interest-bearing current 5 840 1 192 20
receivables, external
Liabilities and Provisions, non- 7 236 1 115 15
interest-bearing, external
Cash flow
Of which Barrier
Coating, Sacks,
AssiDoman Dynas, Sepap
Group % of
January-March 2000 MSEK MSEK Total Group
Operating surplus 1 113 244 22
-- Before write-down of MSEK 1 540
Appendix 3 Facts about the units included in the deal AssiDoman Sacks AssiDoman Sacks manufactures paper sacks which are used to pack building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . and other products. Other significant market segments are the food and chemical industries. AssiDoman Sacks is the second-largest sack producer in Europe. Capacity, million sacks: 900 Number of employees: 1,650 Sack plants: 15 -- Belgium (2): AssiDoman S&M, Vilvoorde (to be closed 30 June 2000); AssiDoman Multisac, Poperinge. -- Croatia (1): Ekovreca, Valpovo. (AssiDoman owns 65% of the company.) -- Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. (1): AssiDoman Sepap Sack , Steti. -- France (3): AssiDoman Charfa Artois, Bethune; AssiDoman Charfa Provence, Rousset; AssiDoman Charfa Alsace, Schweighouse Sur Moder. -- Germany (2): AssiDoman Herkules, Sendenhorst; AssiDoman Herkules (Werk Goslar), Goslar. -- Italy (3): AssiDoman Natro Cellulosa, Romano di Lombardia/Bergamo; AssiDoman Natro Cellulosa, Volla/Napoli; AssiDoman Natro Cellulosa, Misterbianco/Catania. -- Norway (1): AssiDoman Scandisack, Moss. -- UK (2): AssiDoman Sacks, Aylesford; AssiDoman Sacks, Hull. AssiDoman Dynas (Vaja, Sweden) Production capacity: - unbleached sack and kraft paper: 220,000 tonnes Number of employees: 390 AssiDoman SEPAP (Steti, Czech Republic) Production capacity: sack and kraft paper: 149,000 tonnes Linerboard lin·er·board n. A type of paperboard used in making corrugated cartons. : 65,000 tonnes market pulp: 110,000 tonnes Number of employees: 1,050 AssiDoman Barrier Coating Barrier Coating processes paper, liner liner /lin·er/ (lin´er) material applied to the inside of the walls of a cavity or container for protection or insulation of the surface. liner see teat cup liner. , cartonboard and other substrates by coating and laminating lam·i·nate v. lam·i·nat·ed, lam·i·nat·ing, lam·i·nates v.tr. 1. To beat or compress into a thin plate or sheet. 2. To divide into thin layers. 3. with various types of polymers. This creates a barrier against grease grease, mixture of lubricant and thickener. It is used to reduce friction between surfaces from which oils would leak away or cause damage by dripping, or where lubrication must be assured for extended periods. Many greases are mixtures of mineral oil and soap. , moisture and gas diffusion diffusion, in chemistry, the spontaneous migration of substances from regions where their concentration is high to regions where their concentration is low. Diffusion is important in many life processes. . Number of employees: 780 Plants: 7 -- Belgium (1): AssiDoman Belcoat, Duffel. -- Czech Republic (1): AssiDoman Sepap-Barrier Coating, Steti. -- France (2): AssiDoman Polykote, Oise; AssiDoman Polykote, Gournay-en- bray -- Germany (1): AssiDoman Inncoat, Raubling. -- Sweden (2): AssiDoman Barrier Coating, Orebro; AssiDoman Barrier Coating, Timra. ------------ Please visit http://www.bit.se for further information The following files are available for download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. : http://www.bit.se/bitonline/2000/05/16/20000516BIT00070/bit0001.doc http://www.bit.se/bitonline/2000/05/16/20000516BIT00070/bit0002.pdf |
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