Industry Press Releases

Hexatronic signs agreement to acquire American fabric manufacturer - Blue Diamond Industries

Thursday, Dec 07, 2017

Hexatronic Group AB has signed an agreement on the acquisition of all shares in Blue Diamond Industries LLC ("BDI"), an American manufacturer of pipes and tubes for the telecommunications and power market, for a fixed purchase price of $ 24.5 million on a debt-free basis and up to a maximum of $ 2.5 million in additional purchase price. After considering a tax credit of approximately $ 4 million, resulting from the transaction structure, the total purchase price amounts to $ 20.5 million to $ 23.0 million.

Blue Diamond Industries LLC

BDI manufactures High Density Polyethylene (HDPE) tubes and canvas for the telecommunications and power market. The company headquartered in Lexington, Kentucky, has a modern production facility in Middlesboro, Kentucky. BDI has 85 employees.

Sellers of BDI are the management team, all of whom will continue in their current roles.

Purchase Quote and Financing

BDI has generated sales of approximately $ 29 million in the last twelve months with an EBITDA result of approximately $ 4 million and with expected strong growth in the coming years. The acquisition is expected to increase earnings per share in 2018 by 0.50 to 0.60 SEK.

Hexatronic and BDI have jointly decided on a transactional structure that enables the acquisition of shares to be taxed as a collective bargaining ("joint election under Section 338 (h) (10) of the Internal Revenue Code"). The structure entails a tax credit with an approximate estimated value of approximately MUSD 4 for Hexatronic and its shareholders. After considering this tax credit, the effective EBITDA multiples are 5.3x to 5.9x based on the EBITDA earnings of the last twelve months.

The acquisition is planned to be financed through senior bank loans. Net debt / EBITDA for Hexatronic after completion of acquisitions is expected to amount to approximately 1.0x. The completion of the acquisition is subject to customary terms and is expected to be completed in early January 2018.

CEO Comments

"I am pleased to welcome BDI to the Hexatronics Group. The BDI Product Portfolio both complements and strengthens our offer in the US market. In addition, the acquisition significantly strengthens our presence in this important market." says Henrik Larsson Lyon, CEO Hexatronic Group.

"Hexatronic gives us an opportunity to expand our product offering and to continue investing to meet the growing needs of our customers. Hexatronic's unique expertise in fiber and fiber will increase the level of our product development and give us the opportunity to offer a full range of products including microprocessors. " says Sherri Simpson, CEO and majority shareholder in BDI.

Advisor

Ellis & Winters LLP has been Hexatronics legal advisor in connection with the acquisition of BDI.

Gothenburg 4 December 2017

Henrik Larsson Lyon

CEO Hexatronic Group

If you have any questions, please contact:

· Henrik Larsson Lyon, CEO Hexatronic Group, +46 706 50 34 00

This information is such as is required by Hexatronic Group AB under the EU Market Abuse Regulation. The information was provided, through the contact of the above contact person, for publication on December 4, 2017 at. 15.00 CET.

Hexatronic Group AB (publ) is a group that develops, markets and supplies products, components and system solutions with a focus on the fiber optic market. Hexatronic offers a wide range of innovative systems and product solutions for primarily passive fiber optic infrastructure with global brands such as Ribbonet®, Micronet ™, Drytech ™, Lightmate®, FiberHub ™, Matrix, Viper, Stingray, and Wistom. ®. Hexatronic is based in Gothenburg, Sweden and has companies in Sweden, Norway, Finland, Great Britain, China, New Zealand and the United States. The Group is listed on Nasdaq Stockholm under the ticker HTRO. For more information, see www.hexatronicgroup.com .

 

Source: globenewswire.com

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