Product category:
Cabling, Conduit, Accessories and Signal Conditioning
News Release from: Nexans
Edited by the Engineeringtalk Editorial
Team on 14 November 2006
Acquisition kick-starts Asia-Pacific
expansion
Nexans has signed an agreement to acquire the Australian company Olex, the uncontested cable industry leader in the Australasia region, for A$515 million.
Nexans has signed an agreement to acquire the Australian company Olex, the uncontested cable industry leader in the Australasia region, for A$515 million Olex employs 910 people with annual revenue of Eur 330 million at current metal price in 2006 and an EBITDA ratio at constant metal price of more than 15% (fiscal year ended at 30th June 2006)
This article was originally published on Engineeringtalk on 6 Jun 2005 at 8.00am (UK)
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Olex has three manufacturing sites based in Tottenham and Lilydale in Australia, and in New Plymouth in New Zealand, and a dozen sales offices in Australia, New Zealand, Singapore and China.
The company's activities are divided between markets for cables for power network infrastructure (33%), specialty cables for industry such as mining (24%), and cables for the building sector, both energy and telecomms (43%).
"This acquisition is in line with our strategy to expand in the Asia-Pacific area, a fast-growing area, and strengthens the geographical rebalancing of our group".
"The percentage of Nexans' sales made in this area will almost double from 6 to 11%", said Gerard Hauser, Nexans' Chairman and CEO.
"This acquisition also reinforces Nexans' core energy sector business, particularly in high-voltage and special cables for industry, thanks to Olex's broad product range".
"Olex, whose brand name and reputation are well-known, has a strong management team and three advanced production sites".
"Finally, this acquisition will offer us synergies, mainly commercial, in particular through the pooling of Nexans sales teams in the world and Olex ones in the Asia-Pacific area", he added.
The investment of approximately Eur 310 million (that is to say seven times expected 2007 EBITDA before synergies) will be entirely financed from Nexans' existing credit lines.
It will have an accretive impact as from the first fiscal year.
This acquisition will generate balance sheet goodwill of approximately Eur 185 million and result in the group's gearing reaching at the end of December 2006 about 47%.
This transaction is subject to the approval of the Australian authorities.
The closing is expected by the beginning of December.
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