Metalworking Insiders' Report

Six years ago sheetmetal-working-machine specialist Finn-Power Oy (Kauhava, Finland) had been purchased from its founder by Finnish private-equity group EQT III, and, with the infusion of new capital for product development plus some well-placed alliances, it grew from annual sales of around $130-million in 2002 to about $330-million last year.

Its purchase in February by laser-machine producer Prima Industrie S.p.A. (Collegno, Italy), which had annual sales last year of about $240-million, makes Prima a much more substantial player in the market for laser-based sheet-metal fabrication systems.

Prima will now have a presence in 50 countries, with ten manufacturing facilities in Italy, Finland, the U.S., and China, with employment exceeding 1,700 worldwide. All the better to compete in a market with major players including Amada, Mazak Optonics, MegaFab’s W.A. Whitney, and of course, Trumpf.

Finn-Power’s CEO, Tomas Hedenborg, said that there are obvious synergies, and that “our product ranges complement each other in an exceptional manner with few, if any, overlaps.”

Italy’s Prima has a history of growth by acquisition. It incorporated the American firm Convergent Energy in 2000 and GSI Lumonics’ Laserdyne Div. in 2001, then merged them the following year as Prima North America. Early this month Prima closed on the purchase of Italian controls builder OSAI S.p.A. (Barone, Italy), which traces back to the numerical control division of Olivetti in 1957. That deal was launched last summer (see M.I.R. 7/3/07).

Prima says the enterprise value of the Finn-Power deal was agreed to at €170-million (around $252-million), including the net financial debt—around €60-million—at the date of closing.

Prima’s executive director responsible for M&A activity, Marco Pinciroli, commented on the commercial and manufacturing synergies, saying “We estimate that there will be 10-million euros of annual pre-tax synergies.” Furthermore, he said, in future years, “the group will benefit from substantial tax savings due to tax losses carried forward and goodwill amortization in excess of 100-million euros.” The acquisition will contribute to per-share earnings this year; Prima, established in 1977, is listed on the Nuovo Mercato Italian exchange.

The transaction is financed by a long-term line of credit of €183.5-million underwritten by three Italian banks. A portion (€25-million) of the loan facility will be refinanced in the next year with a rights issue, says Prima Industrie.

Finn-Power Oy, Kauhava, Finland. 358-6-428-2111.

Prima Industrie S.p.A., Collegno, Italy. 39-11-4103208.

Send this story to a friend.