SGL Group (Wiesbaden, Germany; www.sglgroup.com) signed the sale and purchase agreement to sell its cathodes, furnace linings, and carbon electrodes (CFL/CE) business to funds advised by Triton Beratungsgesellschaft GmbH (Frankfurt am Main, Germany; www.triton-partners.com). The two parties have agreed on an enterprise value (cash and debt free) of €250 million, which, after deduction of standard debt-like items (mainly pension provisions) as well as other customary adjustments, results in cash proceeds of more than €230 million. The final proceeds will be determined based on the balance sheet at closing. The transaction is subject to customary closing conditions, mainly relating to antitrust approvals. Closing is expected in the fourth quarter 2017.
Triton seeks to invest in and support the positive development of medium-sized businesses headquartered in Europe, focusing on businesses in the Industrial, Business Services and Consumer/Health sectors. The 31 companies currently in Triton’s portfolio have combined sales of around €14.4 billion and around 89,000 employees.
Following the closing of the transaction, approximately 30 employees in Germany and 600 employees in Poland, who are based at the two production facilities in Nowy Sacz and Raciborz, will move from SGL Group to their new owner.
The sale will result in a book profit of approximately €130 million in the current fiscal year of SGL Group.
With regards to the closing of the sale of the graphite electrode business to Showa Denko, final discussions with the U.S. authority on merger clearance are ongoing. The outcome of these discussions will not have any impact on the agreed enterprise value or the expected cash proceeds. Nevertheless, we cannot rule out, from today’s point of view, that closing may slip into the beginning of the fourth quarter 2017.
With this transaction, the former business unit Performance Products (PP) has been sold at a total Enterprise Value of €600 million and approximately €130 million above its book value on June 30, 2016, the date as of which the business was classified as held for sale.
As previously outlined, the proceeds from the sale of the former business unit PP together with the proceeds from the December 2016 rights issue will be used to redeem early the corporate bond with a nominal value of €250 million as well as repay at maturity in January 2018 the convertible bond with a nominal value of €240 million, thus reducing interest expenses, significantly lowering net debt and improving balance sheet ratios.