Munksjö and Ahlstrom to combine, creating a global leader in sustainable and innovative fiber-based solutions

The Boards of Directors of Munksjö Oyj and Ahlstrom Corporation on 7 November 2016 announced the combination of the two companies through a merger.

  • The combination will create a global leader in sustainable and innovative fiber-based solutions with preliminary combined annual net sales of approximately EUR 2.2 billion and adjusted EBITDA of EUR 249 millioni. The combined company will have approximately 6.200 employees as well as production in 14 countries.
  • The combination is expected to create significant value for the stakeholders in the combined company through stronger global growth opportunities and improved operational efficiency. The combined company’s growth ambitions will be supported by a strong balance sheet and strong cash flow generation.
  • Annual cost synergies are estimated to be approximately EUR 35 million. The cost synergies are expected to be gradually realised over two years following completion of the combination with a more pronounced impact expected from the fourth quarter of 2017.
  • The combination will be implemented as a statutory absorption merger whereby Ahlstrom will be merged into Munksjö.
  • Ahlstrom’s shareholders will receive as merger consideration 0.9738 new shares in Munksjö for each share in Ahlstrom owned by them, corresponding to an ownership in the combined company following the completion of the combination of approximately 52.8% for Munksjö shareholders and approximately 47.2% for Ahlstrom shareholders.
    • Based on the one-month volume-weighted average share prices of both Munksjö and Ahlstrom, the corresponding ownership of Munksjö and Ahlstrom shareholders would have been approximately 52.1% / 47.9%, respectivelyii
    • Based on the three-month volume-weighted average share prices of both Munksjö and Ahlstrom, the corresponding ownership of Munksjö and Ahlstrom shareholders would have been approximately 54.0% / 46.0%, respectivelyiii
  • Munksjö and Ahlstrom propose to distribute funds in the total amount of approximately EUR 23 million each, corresponding to EUR 0.45 per share in Munksjö and EUR 0.49 per share in Ahlstrom, to their respective shareholders before the combination is completed in lieu of the companies’ ordinary annual distribution.
  • The completion of the combination is subject to, inter alia, approval by the Extraordinary General Meetings (each, an “EGM”) of Munksjö and Ahlstrom, which are currently expected to be held on 11 January 2017, as well as merger control approvals from relevant competition authorities.
  • The combined entity has obtained underwritten financing for the merger from Nordea and SEB.
  • Shareholders holding in aggregate approximately 32.9% of the shares and votes in Ahlstrom and approximately 39.6% of the shares and votes in Munksjö, have irrevocably undertaken to attend the companies’ respective EGMs and to vote in favour of the combination.
  • The combination is expected to be completed in the beginning of the second quarter of 2017.
  • Financial targets for the combined company are expected to include an EBITDA margin above 14% over a business cycle, net gearing below 100%, as well as a stable and annually increasing dividend.

 

PRELIMINARY TIMETABLE

 

  • December 2016: Publication of merger prospectus
  • 11 January 2017: EGMs of Munksjö and Ahlstrom
    Read more and register for the EGM on www.munksjo.com/egm
  • Beginning of the second quarter of 2017: Expected completion of the combination
  • On or about first trading date following the completion: Expected first trading day of the new shares in Munksjö issued to Ahlstrom’s shareholders

i Based on the twelve months ended 30 September 2016. Excluding merger effects and Ahlstrom’s divestment of Osnabrück.
ii Based on the volume-weighted average share prices of Munksjö (EUR 12.71) and Ahlstrom (EUR 12.70) on Nasdaq Helsinki Ltd during the last month up to and including 4 November 2016.
iii Based on the volume-weighted average share prices of Munksjö (EUR 11.86)  and Ahlstrom (EUR 10.99) on Nasdaq Helsinki Ltd during the last three months up to and including 4 November 2016.

 

PRESS AND ANALYST CONFERENCE

 

Link to the webcast of the press and telephone conference held on 7 November 2016

Stock exchange release published on 7 November 2016

Presentation held at the press and telephone conference

 

MERGER PROSPECTUS

 

Merger Prospectus Supplement published on 17 March 2017

Merger Prospectus Supplement published on 10 March 2017

Prospectus Supplement published on 22 February 2017

Merger Prospectus Supplement published on 2 February 2017

Swedish Language Summary (supplemented)

Stock exchange release published on 16 December 2015

Merger Prospectus published on 16 December 2016