ElringKlinger AG

EANS-Adhoc: ElringKlinger AG close to acquiring cylinder-head and exhaust system gasket business of Freudenberg Group

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  ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
  adhoc with the aim of a Europe-wide distribution. The issuer is solely
  responsible for the content of this announcement.
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12.07.2010

Dettingen/Erms, Weinheim (Germany) July 12, 2010 +++ ElringKlinger AG, Dettingen/Erms, is planning to acquire the static metal gasket business -comprising the cylinder-head and exhaust system gasket business - of Freudenberg & Co. KG, Weinheim. Contractual negotiations have reached an advanced stage. Alongside the Freudenberg subsidiary Burgmann Automotive GmbH, Gelting, Germany, parts of Freudenberg-Meillor S.A.S., Nantiat, France, as well as Oigra Meillor s.r.l., Turin, Italy, are also to be taken over.

In implementing the planned acquisition, ElringKlinger will strengthen its international position within the field of cylinder-head gaskets and high- performance specialty gaskets for engines and exhaust systems.

The conclusion of the contractual agreement and the subsequent execution of the takeover are dependent on information and participation proceedings by employee representatives in France, as well as being subject to other standard provisions such as the approval of the transaction by the antitrust authorities. Subject to these approvals, ElringKlinger anticipates the contract can be signed in September 2010 and that the transaction can come into legal effect on October 1, 2010.

During the crisis year of 2009, the Freudenberg unit, which employs 370 people, generated revenue of EUR 38 million. The forecast for fiscal 2010 as a whole suggests an operating result just slightly below break-even and revenue of approx. EUR 42 million, which would contribute pro rata to ElringKlinger's consolidated revenue effective from the date of acquisition. For 2011, the revenue target stands at almost EUR 50 million. ElringKlinger is of the opinion that the operating margin could be brought closer to that of its own level for the Group by 2012 at the latest. In total, the transaction would be earnings accretive as from 2011.

Both parties to the contract have agreed not to disclose details of the planned purchase price. The purchase price could possibly be within a range of 0.6 to 0.8 times expected revenue for 2011.

Complementary technology for exhaust system gaskets and strengthening of market position The acquisition of the static metal gaskets business from the Freudenberg Group will allow ElringKlinger to cement its position within the market for flat gaskets. In the area of specialty gaskets, the company will have the opportunity to extend its portfolio by adding new products and applications, e.g. in the rapidly growing segment of turbochargers and exhaust recirculation, as well as capturing additional market share among French and German vehicle manufacturers as well as in Italy.

The ElringKlinger Group's cylinder-head and specialty gaskets divisions generated revenue of EUR 150 million as part of original equipment sales to automobile manufacturers in 2009, corresponding to 26% of Group revenue.

Industry consolidation presents interesting opportunities for acquisitions ElringKlinger anticipates a more pronounced rate of consolidation within the automotive supply market, which - beyond organic growth generated through new products - will offer the company good opportunities for targeted technology- driven acquisitions as well as the expansion of market share in existing fields of business. Within this context, the scope of such acquisitions is to remain manageable in order to ensure rapid, earnings-focused integration.

end of announcement                               euro adhoc
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Further inquiry note:

ElringKlinger AG Corporate Communications
Max-Eyth-Straße 2, 72581 Dettingen/Erms
Tel.: +49 (0)7123-724-640 / 137
Fax: +49 (0)7123-724-641
E-mail: stephan.haas@elringklinger.de
karl-heinz.app@elringklinger.de

Branche: Automotive Equipment
ISIN: DE0007856023
WKN: 785602
Index: MDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Düsseldorf / free trade
München / free trade
Stuttgart / regulated dealing
Original-Content von: ElringKlinger AG, übermittelt durch news aktuell

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