In announcement no. 3, dated 8 March 2011, Solar A/S stated that the group had started negotiations for the acquisition of all shares in the four electrical wholesalers Conelgro B.V. in the Netherlands, Claessen ELGB in Belgium, GFI Gesellschaft für Installationstechnik mbH in Germany and GFI GmbH in Austria. Due diligence has been completed and official approvals by relevant authorities obtained, and an agreement has been made for the transfer of the shares of the above enterprises.
Focusing strategy
This acquisition brings with it the need for a clear focusing strategy. This will centre on the planned roll-out of Solar 8000 (SAP) in a number of the group’s existing enterprises i.e. Solar Nederland and Solar Deutschland. Also, the continued operation of the four new enterprises will take priority. For the present, the four enterprises will continue as independent entities and will not as such be integrated into the Solar Group from the outset. Conelgro B.V. in the Netherlands and Claessen ELGB in Belgium will continue to be run by Managing Director Koos Dekker, while GFI Gesellschaft für Installationstechnik mbH in Germany and GFI GmbH in Austria will stay under the management of Managing Director Fred Köster. Both managing directors will refer directly to Group CEO Flemming H. Tomdrup.
Group CEO Flemming H. Tomdrup says about the acquisition:
We look forward to welcoming a number of competent managers and employees to the Solar Group. These are all well-run, profitable enterprises. Through this, we strengthen our market position in the Netherlands and Germany while also facing the positive prospect of access to two markets new to Solar, i.e. Belgium and Austria. At the same time, the group’s capacity within structures and business concepts may be utilised even better in light of the increased turnover.
Financial consequences
- The price of acquisition of 100% of the shares of the enterprises is € 49.3m on a net debt-free basis calculated as at 1 January 2011. The acquisition is financed via withdrawals from the Solar Group’s cash resources.
- Seller will receive return on the purchase price until today’s closing. Cash flows earned until today’s closing accrue to Solar (lockbox concept).
- The acquisition is expected to increase the Solar Group’s 2011 revenue by approx. € 54m and EBITA by approx. € 1.8m.
- Revenue of the acquired activities is expected to amount to approx. € 203m in 2011, while EBITDA is expected to total approx. € 6.6m and EBITA is expected to total approx. € 5.2m on a normalised basis.
- As a result of this acquisition, guidance for 2011 is increased from revenue of € 1,465-1,505m and EBITA of € 35-43m to revenue of € 1,519-1,559m and EBITA of € 37-45m.
- Procurement synergies are expected to contribute with € 3-4m as of 2012 and with minimum € 4m annually in subsequent years.
Financial highlights for the Solar Group and the activities acquired
| H1 2011 | ||
|
Solar Group |
Activities acquired | |
| € million | ||
| Revenue | 718.3 | 96.2 |
| EBITDA | 13.1 | 2.6 |
| EBITA | 7.1 | 1.9 |
| Organic growth (%) | 4.6 | 3.9 |
| EBITA margin (%) | 1.0 | 1.9 |
Q2 proved challenging for all four enterprises as for Solar.
Background information
Conelgro B.V. in the Netherlands has 21 branches and 220 employees.
Claessen ELGB in Belgium has 8 branches and 82 employees.
GFI Gesellschaft für Installationstechnik mbH in Germany has 13 branches and 124 employees.
GFI GmbH in Austria has 6 branches and 108 employees.
Acquisition strategy
Solar’s acquisition strategy, describing elements included in the assessment of any possible acquisition, is available at www.solar.eu under Investor/Financial targets.
Yours faithfully,
Solar A/S
Flemming H. Tomdrup
Facts about Solar
Solar A/S (formerly Aktieselskabet Nordisk Solar Compagni) was founded in 1919 and listed on the Copenhagen Stock Exchange in 1953. Solar is one of Northern Europe’s leading technical wholesalers within electrical, heating, plumbing and ventilation products. The group based in Kolding, Denmark, has subsidiaries operating under the Solar brand in Denmark incl. the Faroe Islands, Sweden, Norway, the Netherlands, Germany and Poland, while also comprising Conelgro B.V. in the Netherlands, Claessen ELGB in Belgium, GFI Gesellschaft für Installationstechnik mbH in Germany and GFI GmbH in Austria. Furthermore, Aurora Group operates in Denmark, Sweden, Norway and Finland. The Solar Group has approximately 3,500 employees.
For further information, please visit: www.solar.eu.
