22.7.2024 15:00:01 EEST | Componenta Oyj | Inside information

Componenta Corporation, inside information, 22 July 2024 3.00 p.m. EEST

Inside information: Componenta acquires the operations of the Kalajoki plant and the Sepänkylä machining and service centre from Fortaco Group for approximately EUR 2.8 million. The transaction strengthens Componenta's service offering and capability for machine and equipment manufacturers.

Componenta has today signed an agreement to acquire operations of Kalajoki and Sepänkylä, including their inventories and fixed assets, from Fortaco. The net sales of the acquired business in 2023 were approximately EUR 9.6 million.

The Kalajoki and Sepänkylä factories carry out welding, machining, surface treatment and installation of demanding steel parts and components. The blacksmith village also has a delivery warehouse for final products. The total production area is approximately 10,000 m².

The plant’s business has focused on serial volumes of 10–500 pieces on an annual basis, and the weights of current products vary between 5–35 tons. The units have the ability to produce large, technically demanding, high-quality and well-documented products for their customers. The main customers of the units are international machinery and equipment manufacturers.

The acquired functions employ a total of about 60 employees. In connection with the closing of the transaction, the employees will transfer to Componenta as old employees.

Structure and price of the transaction

According to the plan, the transaction will be carried out in two stages, so that first Componenta Manufacturing Oy acquires the operations of Kalajoki and Sepänkylä, including their inventories and fixed assets, excluding real estate, EUR 1.8 million at the purchase price from Fortaco Group approximately on 1 October 2024. In the second phase, Componenta Manufacturing Oy buys the properties used by the Kalajoki and Sepänkylä businesses from Fortaco Oy no later than one year after the completion of the first phase. Until then, Componenta pays rent to Fortaco for the properties in Kalajoki and Sepänkylä. The paid rent is deducted from the purchase price of the real estate from EUR 1 million. Componenta finances the transactions with its internal financing and the financing limits at its disposal.

Sami Sivuranta, CEO of Componenta:

"We are very pleased to have the comprehensive know-how of Kalajoki and Sepänkylä and the technology that nicely expands our current production portfolio as part of Componenta.

The acquired entity perfectly complements Componenta's total offering also as a contract manufacturer of heavier production. As a result of the transaction, Componenta will clearly strengthen its position in the direction of its strategic customers in selected industries. 

The need and demand for large and challenging welded structures exists in Componenta's current customers. With this business acquisition, the expansion of our service offering will enable, for its part, a significant increase in cross-selling and an even better and more comprehensive service capability for our strategic customers. In the future, we will also be able to make more extensive use of our internal supply chains, for example, for sheet metal cutting deliveries and heavy machining.”

Fortaco’s business performance and financial position in Kalajoki and Sepänkylä

The reported figures are in accordance with Finnish Accounting Standards (FAS).

The profitability challenges of the acquired business in previous years have been related to the low operating rate resulting from weak demand for individual customers, as well as the failure of end-customer pricing in the unpredictable and exceptionally drastic changes in raw material prices in recent years.

Execution of the transaction

The final closing of the transaction will depend on the usual terms and conditions of the acquisitions. The parties aim to implement the implementation of the transaction on 1 October 2024, and the business operations will become part of Componenta as of the closing date of the transaction. Componenta will publish a separate release on the final closing of the transaction.

Componenta makes a thorough assessment of the accounting principles of the object and prepares a purchase price allocation of the acquisition after the transaction has been completed. Once the purchase price allocation has been completed, Componenta will inform about its effects, if necessary, by means of a separate release.

Componenta's guidance for 2024

If realized, the transaction will not have an impact on Componenta's profit guidance for 2024.

COMPONENTA CORPORATION

Sami Sivuranta
President and CEO

For further information, please contact:
Sami Sivuranta, President and CEO, tel. +358 10 403 2200
Marko Karppinen, CFO, tel. +358 10 403 2101

Distribution:
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Main media
www.componenta.com

Componenta Corporation is an international technology company and Finland’s leading contract manufacturer in the machine building industry. Sustainability and customer needs are at the core of the company’s broad technology portfolio. Componenta Corporation manufactures components for its customers, which are global manufacturers of machinery and equipment. The company’s stock is listed on Nasdaq Helsinki. www.componenta.com