Alimak Group acquires Avanti Wind Systems and intends to propose a rights issue of up to 800 MSEK

Avanti Wind Systems A/S (“Avanti”) is the market leader in vertical access solutions for wind turbine towers with a strong global footprint. The acquisition broadens and diversifies Alimak Group´s product portfolio and offers an expansion into a growing area of renewable energy. The enterprise value is 91 MEUR which corresponds to a normalized EV/EBIT of 9.5x (2016 proforma level). The acquisition will be financed through a bridge loan intended to be repaid by proceeds from a proposed rights issue of new shares with preferential rights for existing shareholders in Alimak Group AB (publ) (“Alimak Group”) of up to 800 MSEK.

“The demand for service lifts for wind turbine towers is expected to grow the coming years due to increased heights of the towers and increased safety requirements. The acquisition expands and diversifies our offering of vertical access solutions for industrial customers globally, enables cross selling opportunities and adds an opportunity to expand after sales well in line with Alimak´s strategy and business model”, says Tormod Gunleiksrud, CEO of Alimak Group.

“Becoming part of Alimak Group enables Avanti to continue its development of best in class safety products and solutions to the benefit of our customers within the wind industry. I see this acquisition as the perfect strategic fit for Avanti, and we look forward to becoming part of the global leader in vertical access systems” says Erik Laursen, CEO of Avanti Group.

Through the acquisition, Alimak Group takes another step forward in the global vertical access industry and the annual group net sales will increase from approximately 3,200 MSEK to 4,200 MSEK, while the number of employees will rise from 1,900 to 2,300. The globally installed base will increase from around 36,000 to 66,000 units.

The acquisition is subject to customary regulatory approvals and is expected to close in the first quarter of 2017. Synergies will primarily be found in the supply chain, through cross-selling and in expansion of the aftersales offering. The acquisition is expected to be EPS accretive and contribute positively to cash flow. Integration costs are estimated to approximately 43 MSEK.

The acquisition will be financed through a bridge loan arranged by Alimak Group´s existing banks. Upon completion of the acquisition, Alimak Group will have a capital structure with an expected leverage (net debt/EBITDA) of around 3.7x, which exceeds the targeted leverage of 2.0x.

In accordance with Alimak Group’s financial targets, Alimak Group’s capital structure shall enable a high degree of financial flexibility and allow for strategic initiatives. Therefore the Board of Alimak Group will call for an Extraordinary General Meeting of shareholders to be held in January 2017 in order to obtain an authorisation for the Board to resolve on a rights issue of up to 800 MSEK with preferential rights for existing shareholders. The rights issue will be launched sometime after the year-end report has been published and is expected to be completed during the beginning of the second quarter of 2017.

Due to the recent acquisitions of Facade Access Group and Avanti during the fourth quarter, Alimak Group will postpone the release of the Year End report 2016 until February 23 2017 (initially scheduled for release on February 17). In the afternoon on February 23, Alimak Group will host an investor update which will include a presentation of revised financial targets for the Group.