Sandvik completes the acquisition of the mining part of Schenck Process Group

Rhea-AI Summary

On November 1, 2022, Sandvik completed the acquisition of the mining business of Schenck Process Group, a leader in screening, feeding, and train loading solutions. The acquisition is expected to generate approximately EUR 200 million in revenue for 2022, with around 70% from aftermarket services. Strong synergies are anticipated, driving a mid- to high-single digit revenue growth above market growth. The acquisition will be reported under Sandvik Rock Processing Solutions, with a neutral initial impact on earnings per share and an EV/EBITDA multiple of about 10x.

Positive

• Acquisition of Schenck Process Group's mining business expected to generate EUR 200 million in revenue in 2022.
• Approximately 70% of expected revenue will come from aftermarket services.
• Anticipated revenue growth of mid- to high-single digits exceeding market growth.
• Strong synergies projected to enhance Sandvik Rock Processing Solutions' EBITA margin.

Negative

• None.

STOCKHOLM, Nov. 1, 2022 /PRNewswire/ -- Sandvik has completed the previously announced acquisition of the mining related business of Schenck Process Group (SP Mining). SP Mining is one of the market leaders in screening, feeding, screening media and train loading solutions in the industry. The company will be reported in Stationary Crushing and Screening, a division in Sandvik Rock Processing Solutions (SRP).

In 2022 the company expects revenues of about EUR 200 million of which approximately 70% is aftermarket, and an EBITA margin accretive to Sandvik Rock Processing Solutions' margin. Strong synergies are expected to drive revenue growth of mid- to high-single digits above market growth. EV/EBITDA multiple including expected five year run-rate synergies is approximately 10x. Impact on Sandvik's earnings per share will initially be neutral.

Stockholm, November 1, 2022

Sandvik AB

For further information, contact Louise Tjeder, Vice President Investor Relations, phone: +46 70 782 6374 or Johannes Hellström, Press and Media Relations Manager, phone: +46 70 721 1008. 

The following files are available for download:

https://mb.cision.com/Main/208/3658903/1646553.pdf

Sandvik completes the acquisition of the mining part of Schenck Process Group

 

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SOURCE Sandvik

FAQ

What impact does the acquisition of Schenck Process Group have on Sandvik's earnings?

The acquisition is expected to have a neutral initial impact on Sandvik's earnings per share.

How much revenue is expected from Schenck Process Group's mining business in 2022?

The expected revenue from Schenck Process Group's mining business for 2022 is about EUR 200 million.

What percentage of the expected revenue from Schenck will come from aftermarket services?

Approximately 70% of the expected revenue will come from aftermarket services.

What is the estimated EV/EBITDA multiple for the acquisition?

The estimated EV/EBITDA multiple, including expected synergies, is about 10x.