An Agreement in Principle has been signed by Trelleborg with their joint venture partner, The Freudenberg Group, to sell their 50% shareholdings in TrelleborgVibracoustic to Freudenberg.
The transaction is still subject to signing of a final agreement and conditional upon the approval of the relevant authorities. It is expected to be completed in the second quarter of 2016 and would be effective as of January 1, 2016. Upon completion, this transaction will represent the conclusion of the plan for Trelleborg’s exit in the joint venture. This transaction is based on an enterprise value of EUR 1.8 billion for TrelleborgVibracoustic.
Peter Nilsson, Trelleborg’s President and CEO said, “TrelleborgVibracoustic has successfully integrated two global leaders within automotive antivibration solutions, and in the process delivered significant synergies, improved its footprint and strengthened its positions over the past years. Throughout this journey we have enjoyed great co-operation with Freudenberg,”
Trelleborg will be given a purchase consideration that is equivalent to an equity value of approximately SEK 6.8 billion. That is in addition to the dividend of approximately SEK 1.4 billion that they received in December 2015. This corresponds to a total value of around SEK 8.2 billion. Approximately 10% of the purchase consideration is subject to TrelleborgVibracoustic’s forecasted sales performance in 2016 and 2017. Subsequently, the final consideration may be somewhat higher or lower than the above equity value.
The purchase consideration corresponds to approximately SEK 25 per Trelleborg share, and will result in a capital gain of around SEK 4 billion (that is approximately SEK 15 per Trelleborg share). The full amount will increase Trelleborg’s equity.
“I am certain that TrelleborgVibracoustic will continue to develop as the global market leader in its segment. The purchase consideration we will receive is in line with our expectations and represents a clean exit option. The transaction allows Trelleborg to further focus on its overall strategy aimed at developing leading positions in selected segments,” said Peter Nilsson.
TrelleborgVibracoustic is currently undergoing a process to change its name to Vibracoustic.
Source: Trelleborg