Sandvik completes the acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd

Rhea-AI Summary

On August 20, 2021, Sandvik announced the completion of its acquisition of 67% of Chuzhou Yongpu Carbide Tools Co., Ltd, a China-based premium solid round tools company. This transaction allows Sandvik to expand its market presence, with revenues of approximately SEK 400 million for the prior twelve months. The acquisition has an initial neutral impact on earnings per share and is expected to enhance Sandvik's manufacturing capabilities. A call option for the remaining shares exists after three years.

Positive

• Acquisition of 67% stake in Chuzhou Yongpu enhances market presence.
• Expected revenue contribution of approximately SEK 400 million.
• Strategic fit within Sandvik Coromant division.

Negative

• Dilutive EBIT margin impact to Sandvik Manufacturing and Machining Solutions.
• Initial neutral impact on earnings per share.

SANDVIKEN, Sweden, Aug. 20, 2021 /PRNewswire/ -- Sandvik has completed the previously announced acquisition of 67% of Chuzhou Yongpu Carbide Tools Co., Ltd, a China based premium solid round tools company, with a call option to buy the remaining part in three years' time.

The company had revenues of approximately SEK 400 million for the twelve month period Q2 2020 to Q1 2021, an EBIT margin slightly dilutive to Sandvik Manufacturing and Machining Solutions. Impact on earnings per share will initially be neutral.

The company will be reported in Sandvik Coromant, a division within Sandvik Manufacturing and Machining Solutions.

Sandvik AB

For further information, contact Louise Tjeder, VP Investor relations, phone: +46 (0) 70782 6374 or Johannes Hellström, Press and Media Relations Manager, phone: +46 (0) 70721 1008.

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Sandvik completes the acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd

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SOURCE Sandvik

FAQ

What is the significance of Sandvik acquiring Chuzhou Yongpu Carbide Tools Co., Ltd?

The acquisition enhances Sandvik's market presence and revenue potential in the premium solid round tools sector.

What financial impact does the Sandvik acquisition have?

The acquisition is expected to contribute SEK 400 million in revenue but has a slightly dilutive EBIT margin.

When was the Sandvik acquisition of Chuzhou Yongpu Carbide Tools announced?

The acquisition was completed on August 20, 2021.

What percentage of Chuzhou Yongpu did Sandvik acquire?

Sandvik acquired 67% of Chuzhou Yongpu.

Is there an option for Sandvik to acquire more of Chuzhou Yongpu?

Yes, Sandvik has a call option to buy the remaining shares in three years.