Stock exchange release June 29, 2007
FISKARS ACQUIRES IITTALA GROUP
FISKARS ACQUIRES IITTALA GROUP The acquisition results in a strong European house of branded goods and design Press conference at 10.00 a.m. on June 29, 2007 at Design Forum Finland (Erottajankatu 7, Helsinki). Fiskars Corporation has signed an agreement to acquire the homeware design company Iittala Group Plc from the private equity company ABN AMRO Capital, the company's management and other private shareholders. The debt-free price for Iittala, which will be finally determined at closing estimated to take place at the end of August, will be approximately EUR 230 million. The enterprise value corresponds to a price per share which is in the middle of the pricing range of the withdrawn IPO earlier this year. The top management of Iittala will retain a holding of about three percent in Iittala. Fiskars has the right to purchase the shares later. The closing of the transaction is subject to approval by the competition authorities. The net sales of Iittala Group in 2006 were approximately EUR 190 million, and some EUR 490 million for Fiskars consumer products operations, Fiskars Brands. The Housewares division represented 9% of the net sales for Fiskars Brands. The operating profit of the Iittala Group in 2006 amounted to approximately EUR 17 million and the profitability of the Housewares division of Fiskars Brands was also good. Iittala Group will form a new European operation within Fiskars Corporation alongside Fiskars Brands. The aim is to pursue synergies by consolidating certain parts of the Housewares division of Fiskars Brands into Iittala Group where the market areas are shared. Synergy effects will follow in the next two to three years and are thereafter expected to reach EUR 5 million annually. Fiskars expects that the acquisition will have a positive effect on the earnings per share during 2008. Fiskars Brands consumer products operations will in the future mainly consist of the three divisions: Garden, Craft, and Outdoor Recreation. Tero Vähäkylä will continue as the CEO of the Iittala Group, and Fiskars Corporation President and CEO Heikki Allonen will become the chairman the Iittala Board of Directors. Iittala Group will continue to employ its existing employees. The transaction will even out the seasonal fluctuation of sales and profits for Fiskars Corporation, as spring is the important garden season for Fiskars Brands, crafts products mostly sell in early to mid summer, while sales and profits for the Iittala Group tend to concentrate towards the end of the year. The acquisition of Iittala Group will strengthen Fiskars and make it a leading housewares company especially in the Nordic region. Through the transaction, Fiskars will increase its brand portfolio by some of the most prestigious brands in Finland, Sweden and Norway; including Iittala, Arabia, Hackman, Rörstrand, Höganäs Keramik, BodaNova and Høyang-Polaris. This selection will be added to by Raadvad, the Danish brand of Fiskars. Fiskars will also expand its knowledge of retail and widen its distribution in the Nordic countries through the Iittala Group's wide network of stores. ‘The acquisition of Iittala Group is a logical step in our strategy, which looks for growth in areas that suit us and our brand portfolio naturally. The transaction strengthens our position as a corporation with deep European roots specializing in design and branded goods. Iittala Group is an interesting and growing company with products and know-how that complement our own. Fiskars and the Iittala Group have surprisingly few overlapping operations. Instead, we will have synergy effects in, for instance, sales, distribution, and the purchase of supplies - all areas where we see a lot of opportunities for cooperation,' says Heikki Allonen, Fiskars Corporation President and CEO. ‘The transaction is positive and very suitable for the Iittala Group. Like Iittala, Fiskars has a long tradition of Finnish design, as well as brand management skills and is a truly international company. Furthermore the company's strong balance sheet makes it possible to develop the operations. I am convinced that Fiskars' wide distribution, sales and supply chain network will give us a stronger base to continue our internationalization strategy,' comments Tero Vähäkylä, CEO of the Iittala Group. Advium Corporate Finance, eQBank Ltd. acted as financial advisor to Fiskars in the transaction. Heikki Allonen CEO and President For more information: Fiskars Corporation President and CEO: Heikki Allonen, phone +358-400-42 1234 www.fiskars.fi Iittala Group Plc CEO: Tero Vähäkylä, phone +358-40-730 2426 www.iittala.com Pictures are available at http://materialbank.iittala.com username: press password: summer Founded in 1649, Fiskars is an international corporation which includes the subsidiaries Fiskars Brands, Inha Works, and the Real Estate Group. Fiskars holdings in associated company Wärtsilä is also an important part of Fiskars Corporation. In 2006, the net sales of Fiskars Corporation was EUR 535 million, its operating profit EUR 86 million. The Corporation employed some 3,000 people around the world. Globally, the Corporation's best known products are its orange-handled scissors and its garden tools. Iittala Group is a leading homeware design company, and offers a wide range of products representing the best in modern Scandinavian design. The Group operates through brands such as Iittala, its leading brand; Arabia; Hackman; BodaNova; Höganäs Keramik; Rörstrand and Høyang-Polaris. In 2006, Iittala Group had a turnover of EUR 190 million, and employed 1,353 people as of the end of the year.