Strategic Acquisition for Daetwyler
Strengthening of the Distrelec Group through acquisition of Swedish ELFA Group
The Daetwyler Group on 18 March 2008 signed a contract with the European private equity company Industri Kapital, the founding family Jensen and management for the acquisition of the Swedish ELFA Group. ELFA is the leading catalogue distributor for industrial electronics and automation in Scandinavia, the Baltic States and Eastern Europe focussing on high margin product segments. With its approximately 400 employees the Group generates sales of around CHF 180 million and an EBITDA of around CHF 35 million and will from the outset contribute to the profit.
Using the Available Scope
The purchase price for the acquisition of the debt free ELFA Group amounts to around CHF 350 million. Completion of the contract with Industri Kapital is scheduled for end April after usual regula-tory conditions have been fulfilled. With the acquisition of the ELFA Group, Daetwyler significantly strengthens its Distrelec Group. This means that the company is making use of the scope that had become available through the sale of the Precision Tubes Division on 28 December 2007, using it for growth acquisition in a high margin, less cyclical business.
New Number Two in Central Europe
The ELFA Group geographically ideally complements the Daetwyler catalogue distributor Distrelec. Distrelec and ELFA with joint sales of around CHF 400 million and representations in 13 countries will range second in the catalogue distribution business for industrial electronics and automation in Central Europe after the British Electrocomponents Group and will advance to principal supplier in the dynamic East European markets. With this strategic, most fitting acquisition Daetwyler sustainably strengthens the already appreciable earnings potential of its Distrelec Group. With regard to market, Distrelec and ELFA are set for optimal organic growth, in particular in Eastern Europe. With regard to costs, there is considerable potential for synergies in purchasing, warehousing, product management as well as for the making of catalogues.
Record Performance in 2007
Supported by their strong niche positions and intensive market activities, the Daetwyler Group com-panies in 2007 achieved high growth rates. Net revenue increased 17.7% to CHF 1.429.4 million from CHF 1,214.8 million a year earlier. With regard to profit, Daetwyler delivered record performance at all levels, as in the preceding years. Operating profit (EBIT) climbed 52.2% to CHF 136.9 million from CHF 90.0 million a year earlier. As a result, the EBIT margin reached 9.6%, improving from 7.4% and beating the target of 8%.
Profit for 2007 came in at CHF 219.5 million, compared to CHF 76.5 million the year before, and can be broken down as follows:
- profit from operations (including the Precision Tubes Division) of CHF 108.0 million, up from CHF 76.5 million;
- a gain of CHF 111.5 million on the sale of the Precision Tubes Division.
In place of a dividend, the Board of Directors will recommend a profit distribution in the form of a par value repayment of CHF 4.95 per bearer share and CHF 0.99 per registered share for approval at the Annual General Meeting. This represents a payout ratio of 38.4%.
Further information on the results 2007 and the acquisition of ELFA will follow at the Daet-wyler Holding Inc. results press conference and the analysts' meeting of 31 March 2008 at the Savoy Hotel in Zurich.
ELFA is the leading catalogue distributor for industrial electronics and automation in Northern Europe with over 55'000 customers relying on its services. The company markets and distributes more than 70'000 different electronics products from 650 suppliers from all over the world. ELFA has representations as well as shops in Sweden, Norway, Denmark, Finland, Poland and the Baltic states. In Russia and around ten other Eastern European countries, ELFA is represented by resellers. ELFA has 400 employees that generate sales of around CHF 180 million.
The Daetwyler Group company Distrelec is the leading Swiss catalogue distributor in the fields of industrial electronic, automation and computer technology. Distrelec has around 370 employees and stocks a range of more than 100,000 standard products. Besides Switzerland, Germany, Austria and Italy the East European growth markets are also targeted. Together with Maagtechnic, Distrelec makes up the Daetwyler Technical Components Division.
Daetwyler Holding Inc. dates to note:
31 March 2008: 08.30 hrs Results Press Conference, Hotel Savoy, Zürich
31 March 2008: 11.00 hrs Analysts' Conference, Hotel Savoy, Zurich
22 April 2008: 17.00 hrs Annual General Meeting, theater (uri) Tellspielhaus, Altdorf
Dätwyler Holding AG
The Daetwyler Group is an international multi-niche player dedicated to industrial component supply and distribution of engineering and electronic components. Its activities concentrate on attractive markets and niches that offer opportunities to increase value added and sustain profitable growth. Having sold the Precision Tubes Division (on 28 December 2007), Daetwyler is focusing on the industrial, construction and pharmaceutical markets with a technology portfolio based on rubber and electrical engineering. The Daetwyler Group comprises the Cables, Rubber, Pharmaceutical Packaging and Technical Components Divisons. With more than 50 operating companies, sales in over 100 countries and some 4,700 employees, the Daetwyler Group generates over CHF 1,400 million in revenue. The Group has been listed on the main board of the SWX Swiss Exchange since 1986 (security number 3048677).