Beijer Ref makes major acquisition in Australia

March  14, 2018

Price-sensitive

Beijer Ref has entered into an agreement to acquire the business of Heatcraft Australia Pty Ltd. The deal means that Beijer Ref doubles its sales in the Asia Pacific Region.

Heatcraft, owned by Lennox International Inc, is one of the largest refrigeration wholesalers in Australia and New Zealand. The company also has operations in China and Singapore and supplies refrigeration equipment, refrigerants and spare parts to customers all over Asia. Sales are made through a large distribution network with over 65 branches.

In addition to wholesale operations, Heatcraft has a manufacturing unit in Wuxi, China, where heat exchangers and cooling units are produced. The deal also includes just over 5 percent of the shares in the public company Kulthorn Kirby, a Thai compressor manufacturer.

Heatcraft's headquarters are located in Sydney. The company employs more than 300 employees and sales in 2017 amounted to approximately SEK 1.1 billion. The company has relatively limited profitability. The business will initially be continued in its existing form and under the brand Heatcraft.

Beijer Ref acquires Heatcraft from Lennox International for a purchase consideration of SEK 450 million excluding operations in New Zealand. For competition law reasons, Beijer Ref has chosen to divest the New Zealand operations of Heatcraft simultaneously with completion of the transaction.

With the acquisition of Heatcraft, Beijer Ref becomes a significantly stronger player in Australia. For Beijer Refs region Asia Pacific, total annual sales will amount to over SEK 2.2 billion yearly after completion, which represents 19 percent of Beijer Ref's global sales, compared with 10 percent today.

Per Bertland, CEO of Beijer Ref, comments:

“This acquisition is in line with our strategy to also grow outside Europe. In addition, we strengthen the OEM segment through the acquisition of the Wuxi production plant in China, which in the long term could provide further opportunities to continue expanding our European green technology to the rest of the world to a much greater extent. We expect that, Australia in particular, will comply with the European directives to phase out environmentally hazardous refrigerants. With the acquisition of Heatcraft, we are even better positioned in the market for green technology which we believe will grow significantly.”

The parties have reached a binding agreement as of today and completion is scheduled for April 2018. The transaction is conditional on a pre-completion restructure of Heatcraft. The acquisition is expected to have positive effects on both sales and earnings in the long term.

Beijer Ref was advised by Oaktower Partnership, Ashurst and Deloitte.

For further information, please contact:
Per Bertland, CEO
Telephone +46 40-35 89 00
Email pbd@beijerref.com

Maria Rydén, CFO
Telephone +46 40-35 89 00
Email mrn@beijerref.com

This information is information that Beijer Ref AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07.30 CET on 14 March 2018.

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