Frövi's technical production capacity is 400,000 tonnes carton board and 250,000 tonnes chemical pulp per annum. In 2004 Frövi had revenues of SEK 2,437 million and an EBITDA of SEK 542 million. In 2004 the combination of Korsnäs Industrial (i.e excluding Korsnäs Packaging and Korsnäs Forestry) and Frövi had a total production capacity of 1.1 million tonnes paper and carton board and had revenues of SEK 6,244 million and an EBITDA of SEK 1,532 million. Frövi has recently received a concession to increase the production capacity to 450,000 tonnes carton board.
The industrial logic of the transaction is strong and the synergies between Korsnäs and Frövi are significant. The integration process is expected to produce annual run-rate EBITDA synergies in the area of SEK 150 million. The acquisition of Frövi will be mainly financed with an increase of Korsnäs' existing syndicated loan facility.
Vigo Carlund, CEO of Korsnäs AB and CEO and President of Investment AB Kinnevik commented: "Ever since Kinnevik's first acquisition of shares in Korsnäs in 1936, Korsnäs has delivered superior returns to our shareholders. The acquisition of Frövi is a unique opportunity for us to further invest in our world-class paper and carton board production and continue to generate solid returns to our shareholders."
"The paper and carton board industry is becoming more international by the day and today we face competition from almost every part of the world. Together with Frövi we can improve our efficiency and strengthen our efforts in product development, which enables us to maintain the most attractive product offering at competitive prices for our customers while continuing to achieve industry-leading returns for our shareholders. Both Korsnäs' and Frövi's mills are well invested and capital expenditures are expected to be below depreciations for both mills in the coming years."
The transaction is subject to approval by competition authorities and is expected to be finalised in the first half of 2006.
Carnegie has acted as financial advisor to Korsnäs and Kinnevik.
Kinnevik will host a conference call this afternoon at 4:15 pm (CET) to present the transaction. To participate in the conference call, please dial the following numbers:
UK: +44 (0) 20 7162 0125
US: +1 334 323 6203
Sweden: +46 (0) 8 5052 0114
The conference call will also be webcast on Kinnevik's website at www.kinnevik.se.
For further information, please visit www.kinnevik.se or contact:
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Vigo Carlund, President & CEO |
+46 (0) 8 562 000 00 |
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Henrik Persson, Investor Relations |
+46 (0) 8 562 000 87 |
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+46 (0) 707 62 00 87 |
