Metso Makes Stock/Cash Offer for Tamfelt
Nov. 5, 2009 - Metso said that it has made a 177 million euro ($261 million) stock plus cash offer to buy paper machine clothing maker Tamfelt.
Under the terms of the deal, Metso is offering Tamfelt shareholders 3 new shares for every 10 Tamfelt shares, plus 0.35 euros cash for some 400,000 outstanding stock options, valuing Tamfelt at around 177 million euros total.
Tamfelt said that its Board "unanimously recommends that Tamfelt's shareholders and holders of Stock Options accept Metso's offer."
The offer period is expected to begin on or about November 23, 2009 and to expire on or about December 18, 2009, Metso said.
"We highly value the competencies and long history of Tamfelt and welcome Tamfelt shareholders to continue the tradition as Metso shareholders," said Jorma Eloranta, president and CEO of Metso.
Tamfelt's chairman, Mikael von Frenckell, said, "The focus of the markets is shifting increasingly outside Europe. We believe that Metso's global network and strong position also in the emerging markets will further strengthen Tamfelt's competitiveness also in these areas."
Metso said benefits of the proposed deal include:
- The combination is estimated to increase Metso's services business
by approximately EUR 140 million annually. At the same time, the
services share of Metso's Paper and Fiber Technology segment
increases from 41 per cent to approximately 50 per cent of net
- Tamfelt's PMC products (paper machine clothing), i.e., forming
fabrics, felts and belts complement Metso's product and services
offering, thus enabling the offering of more competitive and
comprehensive solutions for the companies' shared customer base.
Metso does not currently have paper and board machine clothing
products in its own product offering.
- Metso's extensive installed base and global sales and services
network provide Tamfelt's products and services new growth
potential especially outside Europe.
- Tamfelt's filter fabrics complement Metso's wear product offering
not only in the pulp and paper industry but also, for example, in
the mining and energy industries.
- After the combination, development of technical textiles can be
integrated into Metso's fiber and paper technology research and
development. Tighter co-operation is expected to, for example,
speed up new paper and board machine start-ups, thus supporting
also Metso's new project sales.
- According to Metso's preliminary estimates, the global combination
of operations is expected to result in total synergies of EUR 7-10
million annually. The non-recurring costs arising from the
combination (including costs related to the transaction) are
expected to be approximately EUR 4 million and be phased over
- The combination is not expected to have material impact on Metso's
EPS in 2010.
After the anticipated combination of the two companies, Tamfelt would continue its operations as a business line in Metso's Paper and Fiber Technology segment, Metso said.
"Apart from some administrative operations, the combination is not expected to have any immediate effect on the position of Tamfelt's management or employees. Tamfelt will realize the already agreed and undergoing cost reduction measures and strategic rearrangements," Metso said in a written press statement.
Metso expects to close the deal, which is subject to competition authority approvals in Finland and other countries, in the first quarter of 2010 at the latest.