Metso Corporation´s press release on November 5, 2010 at 9:15 a.m. local time
Metso and the Finnish investment companies Pontos Group and Finnish Industry
Investment Ltd have agreed that both investment companies will each invest
through a directed share issue EUR 10 million into Metso´s fully-owned
subsidiary Valmet Automotive, thereby giving them a total shareholding of 34% in
Valmet Automotive. At the same time, Metso will strengthen Valmet Automotive´s
capital base by converting an internal loan of about 10 million euros into a
subordinated loan. In the same conjunction, it has been agreed that Valmet
Automotive´s key management will be committed to Valmet Automotive through a
separate directed share issue under which the management will invest into Valmet
Automotive, too. Metso´s share of ownership then will be after these
arrangements in excess of 60%. The owners will not exclude new investors from
"In addition to contract manufacturing, Valmet Automotive has successfully
focused its operations in recent years on engineering services for the car
industry and on electric cars. The company´s current production portfolio
includes three next-generation electric cars, and about 25% of the company´s net
sales this year come from the sales of engineering services. We see interesting
development opportunities in Valmet Automotive´s operations; however, since the
automobile industry is not one of Metso´s core customer industries, we have
decided to allow outside investors to participate in the development of Valmet
Automotive´s business, to strengthen the company´s capital base in partnership
with them and in this way find new paths to develop the company, " says Olli
Vaartimo, Chairman of the Board of Valmet Automotive and CFO of Metso.
It has been agreed that as the first step Valmet Automotive will acquire
Karmann´s convertible roof business in Germany and Poland. Valmet Automotive and
the administrative receivers of Karmann´s roof business have signed an agreement
regarding the convertible roof business. The parties have agreed not to disclose
the price of the transaction.
The completion of the transaction is subject to the receiving of the necessary
regulatory permits. Valmet Automotive estimates that the acquisition could be
finalized and the business transferred to its ownership by the end of this year
at the latest.
The acquisition complements Valmet Automotive´s service offering in line with
the company´s strategy in convertible engineering and manufacturing services and
particularly in component manufacturing. Completion of the acquisition would
make the roof business Valmet Automotive´s fourth business line in addition to
engineering, manufacturing and business services.
"This acquisition is so far the most significant step in our strategy to expand
internationally and to become a leading supplier of a wide range of services for
the automotive industry industry. The engineering and manufacturing of
convertible roofs at Karmann represents the best of the industry, and its
customers include BMW/MINI, Daimler, Renault and Bentley. Karmann´s roof know-
how complements Valmet Automotive´s convertible know-how and substantially
increases our capacity in engineering and in component manufacturing, " notes
Ilpo Korhonen, President, Valmet Automotive. "The manufacturing of convertibles
in Europe is estimated to reach the pre-recession level of over half a million
cars by 2012-2013. The roof systems of convertibles require special know-how,
and they are often acquired from specialized suppliers, " Korhonen continues.
"Globally, the electric car segment will grow strongly in the next ten years.
Thanks to its strong quality image and far-sighted strategy, Valmet Automotive
is a frontrunner in this development. For Valmet Automotive, acquiring Karmann´s
roof business strengthens connections to Central Europe´s leading car
manufacturers and gives the company critical mass, enabling the development of
the roof business, the utilization of the accumulated electric car know-how and
the strategic development of the company from a totally new platform. Through
our investment, we want to be part of this development, " note Pontos Group´s CEO
Kai Becker and Finnish Industry Investment Ltd´s Investment Director Heikki
Karmann´s convertible roof business currently employs over 700 people in
Osnabrück, Germany, and Zary, Poland; they will transfer to Valmet Automotive´s
payroll. The net sales of the business to be acquired are estimated to be about
EUR 180 million in 2010. As one of three leading suppliers of roof systems,
Karmann has a market share of about 25 percent and an order backlog spanning
Valmet Automotive is a provider of engineering, manufacturing and business
services for the automotive industry. In 2009 the company´s net sales were EUR
56 million. It employs about 800 people. The company´s Head Office is in
Uusikaupunki, Finland, and it has units in Frankfurt, Germany, and Gothenburg,
Sweden. A new unit will be opened this year in the United States.
Porsche Cayman sports cars, electric Garia golf cars and THINK City urban cars
are currently manufactured in Uusikaupunki. The plan is to start serial
production of Fisker Karma hybrid cars in the first quarter of 2011. There are
engineering projects under way for several customers.
Metso is a global supplier of sustainable technology and services for mining,
construction, power generation, automation, recycling and the pulp and paper
industries. We have about 27,000 employees in more than 50 countries.
For further information for the press, please contact:
Ilpo Korhonen, President, Valmet Automotive, tel. +358 (0)20 484 8000
Johanna Henttonen, Vice President, Investor Relations, Metso Corporation, tel.
+358 (0)20 484 3253
Press conference on November 5, 2010 at 1:00 p.m. local time
A press conference for media will be held (in Finnish) today, Friday, November
5, 2010 at 1:00 p.m. local time at Metso Group Head Office, Fabianinkatu 9A,
Helsinki, Finland. The press conference will be attended by Valmet Automotive´s
President Ilpo Korhonen, Metso Corporation´s CFO and Chairman of Valmet
Automotive´s Board of Directors Olli Vaartimo, Finnish Industry Investment Ltd
´s Director Kimmo Viertola, and Pontos Group´s CEO Kai Becker.
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Source: Metso Corporation via Thomson Reuters ONE