Sandvik to acquire majority stake in China-based Suzhou Ahno

Rhea-AI Summary

Sandvik has signed an agreement to acquire a majority stake in Suzhou Ahno Precision Cutting Tool Technology Co., , a leading China-based company. This acquisition strengthens Sandvik's presence in the Chinese market, particularly in the precision cutting tool segment for industries like general engineering, automotive, and medical, with a focus on electric vehicles. The transaction will see Sandvik owning 72.4% of Ahno, with the company generating revenues of approximately CNY 812 million in 2023. The enterprise value for the acquired stake is CNY 1,456 million, and the deal is expected to close in the third quarter of 2024.

Positive

• Acquisition strengthens Sandvik's position in the Chinese market.
• Focus on precision cutting tools for industries like general engineering, automotive, and medical, with a significant presence in the electric vehicle segment.
• Sandvik to own 72.4% of Ahno post-acquisition, with revenues of approximately CNY 812 million in 2023.
• Enterprise value for acquired stake is CNY 1,456 million, with the deal expected to close in the third quarter of 2024.

Negative

• None.

STOCKHOLM, April 23, 2024 /PRNewswire/ -- Sandvik has signed an agreement to acquire a majority stake in the leading China-based company Suzhou Ahno Precision Cutting Tool Technology Co., Ltd. (Ahno) from the current majority owner, Ningbo Baosi Energy Equipment Co., Ltd and related parties. The company will be reported within the business area segment Sandvik Machining Solutions.

Ahno has a leading position in precision cutting tools in the fast-growing local premium segment, with a broad product-and service offering and extensive sales, distribution and production footprint in China. The main customer industries are general engineering and automotive, in which a significant part is towards electric vehicles, and with medical being a growing segment for the company. With this acquisition Sandvik Machining Solutions further strengthens its leading position within round tools.

"This acquisition will strengthen our position in the strategically important Chinese market. Ahno's competitive assortment and closeness to customers is a great platform to drive further growth of our tooling business in China. Much of the offering is focused on fast growing segments, like electric vehicles, which makes Ahno a perfect fit with our strategy," says Stefan Widing, President and CEO of Sandvik.

Ahno will form the basis of a new China-based division within Sandvik Machining Solutions. The new division will be established following the closing of the transaction. Sandvik's international tooling brands will continue to be operated in China as they are today. Ahno's strong market position, combined with Sandvik's leading competence and international brands presence will enable an attractive growth platform in China for China going forward.

"This acquisition is in line with our strategic ambition to grow in China and build a leading position in the local premium segment. In addition, Ahno enhances our local production capabilities, making it a great addition to Sandvik," says Nadine Crauwels, President Sandvik Machining Solutions.

Following the transaction, Sandvik will own a 72.4% stake in Ahno. This builds on a previous ownership stake of 12.4%. The company was founded in 2002, has approximately 1,200 employees and is headquartered in Suzhou, China. In 2023, the company generated revenues of approximately CNY 812 million (1.2 BSEK), mainly from China. The impact on Sandvik's EBITA margin will be limited. The impact on Sandvik's earnings per share (excluding non-cash amortization effects from business combinations) will be positive. The enterprise value for the acquired stake is CNY 1,456 million (189 MEUR) corresponding to a multiple of 10.9 x EV/EBITDA 2024. The transaction is expected to close during the third quarter of 2024 and is subject to customary closing conditions.

Stockholm, April 23, 2024
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 to acquire majority stake in China-based Suzhou Ahno

 

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SOURCE Sandvik

FAQ

What company is Sandvik acquiring a majority stake in?

Sandvik is acquiring a majority stake in Suzhou Ahno Precision Cutting Tool Technology Co.,

What is the main focus of Ahno's business?

Ahno focuses on precision cutting tools for industries like general engineering, automotive, and medical, with a significant presence in the electric vehicle segment.

How much stake will Sandvik own in Ahno post-acquisition?

Sandvik will own 72.4% of Ahno post-acquisition.

What were Ahno's revenues in 2023?

Ahno generated revenues of approximately CNY 812 million in 2023.

When is the deal expected to close?

The deal is expected to close in the third quarter of 2024.