Sandvik provides an update on M&A costs and PPA impact for the fourth quarter
Sandvik has accelerated its acquisition strategy in 2021, completing 13 acquisitions, including the notable acquisition of Deswik. For Q4, the company anticipates transaction costs of approximately SEK 180 million and PPA amortization of around SEK 260 million. Specific segments report SEK 105 million in transaction costs and SEK 170 million in amortization for Manufacturing and Machining Solutions, while Mining and Rock Solutions will incur SEK 50 million in transaction costs related to Deswik. Overall, the acquisitions span various sectors, indicating a robust growth strategy.
- Completion of 13 acquisitions in 2021, supporting growth strategy.
- Acquisition of Deswik enhances capabilities in mine planning software.
- Transaction costs for Q4 expected to be SEK 180 million, impacting short-term profitability.
- Increased PPA amortization of SEK 260 million could strain financial metrics.
STOCKHOLM, Dec. 23, 2021 /PRNewswire/ -- Sandvik has increased the pace of acquisitions in 2021 as part of its shift to growth strategy, resulting in 13 closed or signed acquisitions during the year. As a consequence, Sandvik expects for the fourth quarter to report transaction costs of around SEK 180 million related to the recently announced acquisitions as well as an increased level of amortisation of surplus values (PPA), estimated to be around SEK 260 million.
Sandvik Manufacturing and Machining Solutions will report transaction costs of around SEK 105 million in total for the fourth quarter. The total amortisation of surplus values (PPA) for the quarter is estimated to be approximately SEK 170 million.
As previously communicated, the transaction costs for Sandvik Mining and Rock Solutions of approximately SEK 50 million are mainly related to the signed acquisition of Deswik, announced on December 2, 2021: Sandvik to acquire leading mine planning software company Deswik. The total amortisation of surplus values (PPA) impact for the fourth quarter is estimated to be approximately 90 MSEK, of which SEK 50 million relates to the newly acquired company DSI Underground.
Out of the total signed or closed acqusistions so far in 2021, seven acquisitions are within Sandvik Manufacturing and Machining Solutions, three in Sandvik Mining and Rock Solutions, one in Sandvik Rock Processing Solutions and two in Sandvik Materials Technology.
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 10 08.
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SOURCE Sandvik
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