KMT Acquires Lidkoping Machine Tools (LMT) From SKF
3 April 2000
KMT Acquires Lidkoping Machine Tools (LMT) From SKF
STOCKHOLM, Sweden--April 3, 2000--KMT-- KMT acquires LMT from SKF at an acquisition cost of just above
MSEK100
-- By the acquisition KMT's turnover increases about 30% on an
annual basis and the profit per share is estimated to increase
with SEK 3.50-4.00 after two to three years, i.e. about 25%
compared with -99
-- LMT holds a world leading position as supplier of precision
grinding machines and equipment for manufacture of bearings
-- LMT is far ahead when it comes to technical development and
has promising development projects
-- The acquisition yields co-operation profits within research
and development as well as regards purchase and marketing
-- Continued co-operation with SKF regarding deliveries of
machines, equipment and technical development is also included
in this agreement
Agreement
KMT has come to an agreement with SKF about acquisition of Lidkoping Machine Tools AB, LMT, leading supplier of, among other things, advanced production machines and system solutions for precision grinding of bearings. The acquisition widens the business activities within KMT's product area Precision Grinding. The agreement is conditional by due diligence, which shall be fulfilled at the end of April.
Growth Strategy
An important part of KMT's growth strategy is growth by acquisitions within existing product areas. The LMT acquisition is to be considered as a first step of the implementation of this strategy.
KMT also has a strategy of being product leader within selected segments for production machines and system solutions to customers with the highest demands on accuracy and performance within the product areas Precision Grinding, Sheet Metal Working and Tube Forming.
Today the KMT group has a position as world-leader regarding equipment for precision grinding of parts in fuel-injection systems via the subsidiary UVA International AB. By the acquisition of LMT, KMT will also have a position as world-leader within one more market segment, equipment for precision grinding of bearings. A continued technical co-operation between KMT and SKF is also included in the agreement as well as that LMT will continue to deliver machines and equipment to the SKF Group.
Acquired Business
Lidkoping Machine Tools was founded in 1875 and has been a wholly owned subsidiary of SKF since 1929. The company has 300 employees today and the turnover is estimated to about MSEK 350 this year. In addition to SKF, there are several customers within the segments Bearing Industry, Automotive Industry as well as Electromechanical/Hydraulic Industry. About 40 per cent of the turnover go to customers outside the SKF group, among others to Volkswagen, Audi and Bosch.
Due to decreasing volumes LMT has made a loss for the last three years. During 1999 the loss level has been reduced considerably by efficiency improvements and cost reductions.
Financial Aspects
The acquisition cost, i.e. the purchase sum plus the take-over from SKF of net interest-bearing debt amounts to just above MSEK 100. Financing of the acquisition is made with own funds and through increased borrowing. KMT's equity ratio after the acquisition is estimated to more than 35 percent and the financial readiness for further acquisitions is good.
In addition to the direct acquisition cost KMT will make provisions for further necessary restructuring costs. The size of these costs will be confirmed within the next months.
LMT will be consolidated into the KMT group per 1 May 2000. As regards the organization, LMT is an own subsidiary direct under KMT. The business activities will be reported in the product area Precision Grinding.
This financial year LMT is estimated to contribute with a turnover of more than MSEK 200 to the consolidated turnover. During the same period the affect of the profit per share of the KMT group is estimated to be marginal. LMT is estimated to start contributing to KMT's profit per share from 2001 and be able to increase it to SEK 3.50-4.00 in two to three years.
Jerry Karlsson, LMT's President, says: "It is positive for LMT to join a group of companies acting with the same core business as we. I am convinced that this will give LMT better possibilities to grow in the long run".
KMT's President and CEO Bjorn Kumlin summarises: "KMT's strategy is to have an organic growth as well as by acquisitions. LMT supplements our present activities in an excellent way and our most profitable product area will be strengthen further. Technically LMT is far ahead thanks to the research and development of the company. Furthermore, many of our customers are common. In line with the action programm for the other activities of the group we will work to focus LMT's activities, realize synergies and increase the profitability".
For further information also see www.kmt.se, www.lidkoping.com, and www.skf.com
Karolin Machine Tool (KMT) markets, develops and manufactures advanced production machines and system solutions for the engineering industry within the segments Tube Forming, Sheet Metal Working and Precision Grinding. KMT is quoted on the OM Stockholm Stock Exchange O-list.
------------------- Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/04/03/20000403BIT00100/bit0001.doc http://www.bit.se/bitonline/2000/04/03/20000403BIT00100/bit0002.pdf
