NKT has decided to split the Holding company into two separately listed companies, with the timing of this decision being linked to NKT Cables’ acquisition of ABB’s high-voltage cables business.
NKT is the active and long-term owner of three industrial businesses including Nilfisk, NKT Cables, and NKT Photonics.
With the acquisition of ABB’s high voltage cables business, NKT Cables is expected to become one of the leading power cable suppliers in Europe, NKT said.
Following the closing of the acquisition of ABB HV Cables, NKT Holding will be split into two separately listed companies; NKT Cables, including ABB HV Cables and NKT Photonics; and Nilfisk.
Both businesses will be viable, stand alone companies, NKT said.
Chairman of NKT Holding’s Board of Directors, Jens Due Olsen, said: ”Not only do we position NKT Cables among the industry leaders with the acquisition of ABB’s high-voltage cables business. It also paves the way for the split of our Holding company into two separate, viable listed companies that will be among the leading players in their respective industries. Both actions are expected to create significant short- and long term value for our shareholders.”
As reported earlier today, NKT Cables has entered into a purchase agreement to acquire ABB HV Cables, a wholly owned business of the ABB Group, at an enterprise value of EUR 712 million.
Including ABB’s investment in a new cable-laying vessel to be delivered and paid in Q1 2017, total enterprise value amounts to EUR 836 million.
Combined, the two businesses had a 2015 revenue of EUR 1.7bn and operational EBITDA margin of 11.4%. The full impact of annual synergies of approx. EUR 30m is expected by end-2018. Total integration costs are expected to be a total of EUR 35-40m by end-2018. The integration process is expected to be completed by end-2018.
The new combined business is expected to be strongly positioned in both the growing offshore wind industry as well as for the development of the interconnector grid in Europe.
”We operate in an industry where innovation and scale is instrumental, and ABB’s cables business is the perfect strategic match to our business. Joining forces puts us among the leaders in the European high-voltage power transmission industry based on a strong and efficient manufacturing network, geographical presence and complementary know-how. Furthermore, with access to ABB’s DC cable technology we are strongly positioned to take active part in the development of the European grid infrastructure planned for the next 10-15 years. We look forward to welcoming our many new and highly skilled colleagues from ABB,” President and CEO of NKT Cables, Michael Hedegaard Lyng, said.