18 December 2006
Lassila & Tikanoja has signed an agreement on the acquisition of the majority (70%) of the shares of Biowatti Oy from the acting management of the company. L&T has also made a commitment to redeem the remaining thirty percent of the shares by the end of the year 2011. The acquisition price for the seventy percent portion is EUR 30 million. No interest-bearing liabilities are transferred in the acquisition.
The acquisition is estimated to improve the earnings per share of L&T for the year 2007 by around 8 cents assuming that it will be closed on 1 February 2007. In the consolidated financial statements the whole acquisition price (100%) will be recognised as acquisition cost. No minority interest is separated from the profit or equity, but the estimated acquisition price of the remaining 30 percent (EUR 6 million) is recognised as liability. The final price of the 30 percent portion will be determined based on the future earnings of Biowatti. As a result of the acquisition, the equity ratio of L&T will decrease by approximately 6 percentage points, it having been 50.1% on 30 September 2006.
Biowatti is the leading Finnish bio energy supplier, operating in the procurement, processing, marketing and delivery of bio fuels. The main products are by-products of forest and wood processing industries and logging chips. The company supplies raw material for the pulp and board industries as well as pellet factories. It also provides materials for landscaping, composting and for use as bedding. Biowatti employs 38 people.
The estimated net sales of Biowatti for the year 2006 are EUR 65 million. Bio fuel sales account for two thirds and industrial raw materials sales for one third of the net sales. The growth in net sales of Biowatti is expected to be more than ten percent in 2007, and the operating margin is estimated to be around 7 - 8 percent.
Through the acquisition of Biowatti L&T implements its growth strategy. The bio fuel markets are expected to grow strongly in Finland during the next few years, and a national goal has been set to double the utilisation of forest energy by the year 2010. L&T seeks to have a role in this development. Through this acquisition L&T becomes a significant player in this sector.
The name of the acquired company will be L&T Biowatti Oy, and it continues its operation as a part of Lassila & Tikanoja Group. Mr Pekka Laurila will continue as Managing Director.
The acquisition is subject to approval of the competition authority. The resolution is expected during January 2007.
LASSILA & TIKANOJA PLC
Jari Sarjo
President and CEO
For further information, please contact:
Jari Sarjo, President and CEO, Lassila & Tikanoja plc, tel. +358 10 636 2810
Martin Forss, Vice President, Corporate Planning and Business Development,
tel. +358 500 413 621