Gränges is a global leader in aluminium rolling and recycling in selected niches. We’re committed to creating circular and sustainable aluminium solutions in partnership with our customers and suppliers - for a better future.
Gränges is a global leader in aluminium rolling and recycling. We help customers grow and transition to climate neutrality. Our products enable efficient climate control in transportation and buildings, electrification and battery components, recyclable packaging, and more.
Gränges Endure is our product brand for aluminium solutions that combine the highest technical and sustainability performance.
Gränges’ ambition is to create circular and sustainable aluminium solutions for a better future. Sustainability, alongside people and safety, is a key driver of the company’s long-term competitiveness and value creation. These elements are at the core of Gränges’ business and strategy, emphasizing their central role in differentiating the company within the industry.
Investor Relations Director
Anna Hedenberg
anna.hedenberg@granges.com +46 76 869 96 48
Working at Gränges means being surrounded by proud, talented and motivated colleagues – in a safe work environment. Our success is based on extensive industrial craftsmanship and highly employees.
Today 3,500 employees make up Gränges Group in three regions: Americas, Asia and Europe. Gränges is a global company with local presence. Are you joining the team?
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VP Communication & Investor Relations
Sara Lander Hyléen
sara.hyleen@granges.com +46 709 16 16 41
Gränges AB (publ) (“Gränges”) has signed an agreement (the “Agreement”) to acquire the Polish flat rolled aluminium producer Aluminium Konin from Boryszew Group (the “Transaction”).
The acquisition strengthens Gränges’ product offering and presence in Europe and contributes with strong positions in new attractive niche markets. Aluminium Konin adds new capabilities and capacity to expand Gränges’ offering for future transportation solutions, such as electric vehicles, and contributes to a stronger position in growing markets. The acquisition is a good strategic fit for Gränges and enhances the company’s platform for sustainable profitable growth.
Summary
“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,” says Gränges’ CEO Johan Menckel.
“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,” says Jannis Kitsakis, Senior Portfolio Manager at The Fourth Swedish National Pension Fund, representing the largest shareholder in Gränges.
The transaction Gränges has signed an agreement to acquire the Polish flat rolled aluminium producer Aluminium Konin from Boryszew Group. The Agreement provides that Gränges will acquire all outstanding shares of the company Impexmetal S.A. (“Impexmetal”), the assets of which consists of Aluminium Konin and certain other assets (the “Other Assets”). The Agreement is subject to conditions, including that the Other Assets are separated from Impexmetal by way of a demerger, following which the assets of Impexmetal will consist solely of the operations of Aluminium Konin. The demerger is expected to be completed during the first quarter of 2020.
Gränges will acquire all outstanding shares in Impexmetal for SEK 2.3 billion (PLN 938 million) on a cash and debt free basis (Enterprise Value), corresponding to an EV/EBITDA multiple of 6.9x LTM September 2019 EBITDA. The Transaction is expected to be EPS accretive within twelve months from its completion. The purchase price is subject to standard adjustments to the Enterprise Value, based on, among others: net debt, net working capital, pre-paid capex and other adjustments resulting from the terms and conditions of the Transaction.
The Transaction is subject to regulatory approval by the relevant competition authorities. Closing is expected in the second quarter of 2020.
The acquired business will be a wholly owned subsidiary of Gränges AB.
The acquired business and transaction rationale Aluminium Konin operates a cost competitive, integrated rolling mill with a complete set of highly developed capabilities and offers a diversified product portfolio of flat rolled aluminium products. The product portfolio includes material for automotive heat exchangers and structures, speciality packaging, and general coil and sheet products for customers in Europe. The location in Konin, Poland, with close geographical proximity to key customers, provides good opportunities to further expand closed loop recycling systems, an area of increased importance for the aluminium industry.
The acquisition of Aluminium Konin is a good strategic fit for Gränges and enhances the company’s platform for sustainable profitable growth.
Key rationales for the acquisition:
Aluminium Konin has an annual production capacity of approximately 100 ktonnes and a strong financial track-record. Sales by September LTM 2019 were approximately SEK 3.0 billion and EBITDA SEK 338 million. The company has approximately 750 employees.
Gränges will complete an expansion program initiated by the seller, of SEK 1.1 billion over three years, to further strengthen Aluminium Konin’s capabilities and increase the capacity to 140 ktonnes. The program will be financed by future cash flows and existing credit facilities.
Sustainability Gränges creates value from sustainability and has a strong commitment to develop more sustainable products, minimize the environmental impact of its operations, uphold ethical business practices, and provide a safe and good working environment. Through the acquisition of Aluminium Konin, Gränges can take a more active role in the transition to more sustainable transportation solutions by offering a broader range of sustainable products to applications such as electric vehicles. By implementing Gränges’ well-established sustainability framework and tools, in combination with its system for lean operations, there is a potential to reduce the carbon footprint of the acquired business through improved material efficiency, increased recycling, reduced energy intensity and an improved energy mix.
Financials Gränges’ sales volume, including the acquired business, would be 456 ktonnes for LTM September 2019. Corresponding net sales would amount to SEK 15.4 billion and combined adjusted EBITDA would be SEK 1.7 billion. The combined financial information presented in this press release and in the table below is for illustrative purposes only. It does not include any other effects of the Transaction, such as synergies, integration costs or other transaction related items. The combined financial information is not financial pro forma information and has not been audited or otherwise reviewed by the companies’ auditors.
Combined financials for LTM September 2019
Financing Gränges has secured bank financing to finance the Transaction. Danske Bank, Nordea Bank and Svenska Handelsbanken act as Underwriters and Bookrunners for a SEK 2.3 billion bridge loan facility with a time to maturity of 18 months. This is intended to be repaid by bank loans, debt capital market instruments, and a new share issue with preferential rights for existing shareholders to a total amount of approximately SEK 2 billion.
The Board of Directors of Gränges intends to propose that an extraordinary general meeting authorizes the Board of Directors to issue new shares through the Rights Issue. Approximately SEK 1.5 billion of the Rights Issue proceeds will be used to finance part of the Transaction, and approximately SEK 0.5 billion will be used for future growth investments in line with Gränges’ strategy. The Rights Issue is expected to be carried out in the second quarter of 2020.
The Fourth Swedish National Pension Fund, representing 9.5 per cent of the shares and votes in Gränges, has committed to vote in favour of the Rights Issue at the extraordinary general meeting and to subscribe for its pro-rata share of the Rights Issue. The financing banks have entered into a standby underwriting agreement, subject to customary terms, for the remaining part of the Rights Issue. In addition, shareholders holding in total 24.6 per cent of the shares and votes in Gränges, including AFA Insurance, Swedbank Robur and Handelsbanken Fonder, have expressed their support for the Transaction and that they have the intention to subscribe for their respective pro-rata share of the Rights Issue.
Post completion of the Transaction and Rights Issue, Gränges’ net debt is expected to amount to around SEK 4.3 billion or 2.6 times adjusted EBITDA.
Webcasted conference call Gränges will host a webcasted conference call Thursday 28 November 2019 at 13:00 CET with CEO Johan Menckel and CFO Oskar Hellström. The webcast can be accessed on www.granges.com/investors. The presentation will be in English. To take part in the telephone conference, please call +46 8 51999355 (Sweden), +44 203 1940550 (United Kingdom) or +1 8552692605 (USA). Please call in a few minutes before the webcast begins.
For further information, please contact: Johan Menckel, CEO johan.menckel@granges.com, tel: +46 8 459 59 00
Oskar Hellström, CFO and Deputy CEO oskar.hellstrom@granges.com, tel: +46 8 459 59 00
Johan Dufvenmark, VP Group Treasury & Investor Relations johan.dufvenmark@granges.com, tel: +46 705 97 43 75
The information in this press release is such that Gränges must disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on Thursday 28 November 2019, at 07:30 CET.
About Gränges Gränges is a global supplier of rolled aluminium products for heat exchanger applications and other niche markets. The company develops, produces and markets advanced materials that enhance efficiency in the customer manufacturing process and the performance of the final products. The company’s geographical markets are Europe, Asia and the Americas. Its production facilities are located in Sweden, China and the United States, and have a combined annual capacity of 420,000 metric tonnes. Gränges has about 1,800 employees and net sales of SEK 13 billion. The share is listed on Nasdaq Stockholm. More information on Gränges is available at www.granges.com.
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