Im Funkwerk 5
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Funkwerk AG divests control and signalling technology
- Scheidt & Bachmann GmbH set to take over Funkwerk operations in Kiel and Malmö subsidiary
- Further strategic focus on core segments
- 2013 sales and earnings forecast adjusted
Funkwerk AG is set to sell its Kiel operations along with its Swedish subsidiary Funkwerk Information Technologies Malmö AB in a deal effective 31 December 2013, 24:00. Divesting its complete railway control and signalling technology business, previously part of Traffic & Control Communication (TCC), Funkwerk has set up Schienenverkehr System Technik GmbH (SST GmbH) as a new company to pool all assets of the Kiel site along with the shares of the Swedish subsidiary. The shares of SST GmbH have been bought by Scheidt & Bachmann GmbH, Mönchengladbach, a supplier of railway signalling technology for more than 100 years. The purchase price has not been disclosed.
Execution of the contract is subject to the usual reserve of conditions precedent. The Executive Board of Funkwerk AG expects all conditions to occur and approval by the banking consortium to be given by the end of May 2014.
Funkwerk AG has opted to sell its business unit as a further step in the strategy to focus on its core segments. As part of the TCC segment, operations control and signalling technology had very few technical links to other operations in this segment, which primarily include stationary and mobile information and communication systems for railway operations, and therefore little synergistic potential. A further fact bearing on the decision to sell the unit is said to be the current consolidation of the market for signalling technology in which Funkwerk holds a relatively minor share with an annual sales volume of around EUR 15m. The strategic approach of its new owner, in contrast, presents good prospects for Kiel and Malmö to scale up operations, and covers the prerequisites for growth in the Scheidt & Bachmann group.
By the same token, the sale will reduce the commitment of resources within the Funkwerk group and thereby improve its financial situation. In the first three quarters of 2013 the divested companies generated sales of around EUR 10m, with operating loss of around EUR 3m resulting primarily from substantial development costs incurred for signalling technology in the passenger transport sector.
Following the sale, Funkwerk predicts adjusted group sales of its continued operations to range at over EUR 100m in fiscal 2013, with positive group earnings before restructuring and impairment costs estimated at just under EUR 1m.
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