Combination of Outotec and Metso Minerals - Metso Flow Control to Become an Independent Company

Combination of Outotec and Metso Minerals - Metso Flow Control to Become an Independent Company 01.07.2020 00:00

Combination of Outotec and Metso Minerals to Create a Leading Company in Process Technology, Equipment and Services Serving the Minerals, Metals and Aggregates Industries
Metso Flow Control to Become a Separately Listed Independent Flow Control Equipment and Services Company under the Name of Neles.
Creation of Neles
• Under the name Neles, Metso will continue as a separately listed entity focused on flow control, independent from Metso Outotec and 100% owned by Metso shareholders at completion
• Neles will be a best-in-class flow control company with €593 million in sales and €90 million in EBITA (illustrative combined 2018 figures)
• The current legal entity Metso will be renamed Neles; its headquarters will be in Vantaa, Finland, and its listing on Nasdaq Helsinki will continue
• Mr. Olli Isotalo will become CEO of Neles and will join Metso’s management team as of July 15, 2019. Further information on the proposed board for Neles will be provided in due course for approval by Metso AGM in 2020
A Leading Best-in-Class Pure-Play Flow Control Company
As a result of the combination of Metso Minerals and Outotec, Metso will be renamed as Neles and will become a globally recognized flow control company with highly attractive market positions.
Neles will continue to be listed on Nasdaq Helsinki.
Neles is expected to create additional value for Metso’s shareholders as a separate entity through:
• Leading position as a flow control solution provider with market leadership across pulp & paper valves and down stream oil & gas control valves
• Continued outperformance of market growth with best-in-class profitability and proven resilience through the cycle
• Diversified sales mix both by region and industry
• A fully focused, dedicated management to deliver shareholder value and leverage further growth opportunities
• Solid balance sheet and financial position
• Crystallization of attractive sector trading multiples
Neles’ Strong Financial Profile
As a result of its bespoke strategy focusing on pulp & paper and downstream oil & gas as core end markets, Neles has outperformed its underlying markets over the past few years, growing sales at CAGR of 6.0% over 2016-2018 and improving EBITA margins to 15.2% during the same period.
At year-end 2018, Neles had illustrative combined net cash of €72 million. To support the capital structure of Neles, Metso has entered into a €150 million term loan facility agreement, which may be used for the repayment and replacement of Metso’s credit facilities and other liabilities that benefit the flow control business and are to remain with Neles post completion. Prior to the completion, Metso is also expected to enter into a new revolving credit facility of €200 million to be used for the general corporate purposes of Neles.
Management and Governance
Mr. Olli Isotalo will become Neles’ CEO. Further information on the proposed board for Neles will be provided in due course for approval by Metso AGM in 2020.
Neles’ headquarters will be in Vantaa, Finland. Following completion, Neles is expected to have approximately 2,900 employees worldwide.