cunova, a Leading Global Manufacturer of High-end Specialty Copper Alloy Products, and SDCL EDGE Acquisition Corporation Announce Their Business Combination
- None.
- None.
cunova to simultaneously acquire KME Group’s aerospace specialty metals business
- The proposed business combination is expected to create a scaled, global manufacturer of mission-critical specialty copper alloy products with growth opportunities across diverse end markets including casting, aerospace, maritime, industrial and energy.
- The combined company will have a compelling and proven business model with historically high recurring revenue and attractive margins, dynamic competitive positioning and barriers to entry, and limited exposure to commodity price variation risk.
-
If the proposed business combination is consummated, the combined company is expected to have an enterprise value of approximately
US .$736 million
OSNABRÜCK,
Headquartered in Osnabrück,
cunova has an established reputation and long-term relationships with a loyal base of blue-chip customers, including a majority of the 25 largest steel companies across four continents. cunova’s products are often both mission-critical and integrated into clients’ processes. Copper is one of the most widely used metals today, and it is anticipated that the combined company will be well positioned to capitalize on a sustained global demand for copper alloys with high conductivity performance in thermal or electrical applications, driven by new emerging markets and technological advancements. cunova’s acquisition of the whole aerospace specialty metals business of KME Group (“KME Aerospace”) would enable the combined company to also serve the space exploration and general aerospace markets.
cunova is dedicated to resource efficiency and the circular economy, and supports the transition to energy conservation. cunova’s products offer high levels of endurance, including temperature and pressure resistance, allowing them to last longer without replacement and enabling critical components to be recycled. In 2023, over half of the copper used to make cunova’s products was sourced from recycled scrap.
“We are thrilled to partner with SEDA. They have a deep understanding of our business, vision, and growth opportunities,” said Werner Stegmüller, CEO of cunova. “As a global leader in the copper industry with an extensive history of success, cunova is relentlessly committed to understanding and anticipating our customers’ needs. We strive to be constantly innovative so as to deliver high-end, value-added products and solutions that are both mission-critical and specific to our customers’ processes. As a result, we have built exceptionally close relationships with our customers and an attractive business model with recurring revenues. We believe we are well-positioned to deliver sustained, profitable growth and returns to shareholders by leveraging our world‑class platform to expand into new markets, driven by emerging technology and trends, including space exploration.”
“We are excited to join forces with KME Aerospace, which we believe will give us access to a new, exciting, and high-growth end market. Space exploration activity is currently outpacing the reusability rate of engines and we expect this could triple our addressable copper component market opportunity from 2023 to 2030. As an established provider of mission-critical rocket engine components to nearly all the western tier one companies in the space exploration sector, we believe KME Aerospace currently has a first mover advantage in this end market,” added Werner Stegmüller, CEO of cunova.
“We are extremely pleased to be partnering with cunova to help them advance their vision and growth strategy,” said Jonathan Maxwell, Chairman and Co-CEO of SEDA. “We set out to acquire a company with a proven business model and strong growth prospects that is poised to create long-term value for shareholders, and we believe cunova meets these criteria. Finally, as a provider of critical components that support the transition to energy conservation and resource efficiency in the maritime and steel industries and, following its acquisition of KME Aerospace, the aerospace industry, the combined company is expected to contribute meaningfully to its customers’ sustainability initiatives.”
“As part of cunova, we believe KME Aerospace will be well positioned to capitalize on growth opportunities in space exploration. As the anticipated majority shareholder of cunova following the listing, KME Group will also have a vested interest in cunova’s long-term growth and success,” said Vincenzo Manes, Chairman of KME Group.
Transaction Overview
Under the terms of the proposed business combination agreement, cunova will be indirectly acquired by a publicly-listed, successor entity of SDCL EDGE Acquisition Corporation. Also as part of the proposed business combination, cunova will acquire KME Aerospace from KME Group. The combined company is expected to be listed on the NYSE. Paragon Partners, the current majority shareholder of cunova through its vehicle The Paragon Fund III GmbH & Co. geschlossene Investment KG (“Paragon”), is expected to exit cunova as a result of the proposed business combination, and KME Group is expected to become the majority shareholder of cunova.
At closing, the combined company is expected to have a pro-forma enterprise value of approximately
The business combination values cunova and KME Aerospace at an enterprise value of approximately 9.4 times cunova’s pro forma 2023 Adjusted EBITDA of
The board of SEDA and the shareholders of cunova have approved the proposed business combination subject to customary closing conditions. The closing conditions include, but are not limited to, obtaining all required regulatory approvals, the approval of the shareholders of SEDA, securing minimum cash of
Adjusted EBITDA Reconciliation
cunova |
|
|
|
US$m1 |
2021 |
2022 |
2023P |
Net income |
22 |
15 |
6 |
Income taxes |
4 |
8 |
9 |
Interest expense |
10 |
20 |
33 |
Depreciation & Amortization |
10 |
9 |
8 |
EBITDA |
47 |
52 |
56 |
Exceptional Items (carve-out cost) |
8 |
7 |
5 |
Adjusted EBITDA |
55 |
59 |
61 |
1. Assumes 2023 average EUR/USD exchange rate of 1.081; values may not add up due to rounding
Aerospace |
|
|
|
US$m1 |
2021 |
2022 |
2023P |
Net income |
- |
4 |
12 |
Income taxes |
- |
2 |
5 |
Interest expense |
- |
- |
- |
Depreciation & Amortization |
- |
- |
- |
EBITDA |
- |
6 |
18 |
Exceptional Items (carve-out cost) |
- |
- |
- |
Adjusted EBITDA |
- |
6 |
18 |
1. Assumes 2023 average EUR/USD exchange rate of 1.081; values may not add up due to rounding
Advisors
Rothschild & Co is serving as sole financial and capital markets advisor to SEDA. Skadden, Arps, Slate, Meagher & Flom (
About cunova
Headquartered in Osnabrück,
About KME Aerospace
KME Aerospace is a leading engineering business that supplies high-tolerance copper alloy components to major players in the aerospace industry. Through the expected acquisition of KME Aerospace by cunova, the combined company would also serve the space exploration market.
About SDCL EDGE Acquisition Corp.
SEDA is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. For more information above SEDA, please visit https://www.sdcledge.com.
The information contained on, or that may be accessed through, the websites referenced in this press release is not incorporated by reference into, and is not a part of, this press release.
Additional Information and Where to Find It
In connection with the proposed business combination, the combined company will file a registration statement with the SEC, of which a proxy statement/prospectus will form a part. The definitive proxy statement/prospectus and other relevant documents will be sent or given to SEDA’s shareholders as of a record date to be established for voting at SEDA’s shareholder meeting relating to the proposed business combination. SEDA and the combined company may also file other documents regarding the proposed business combination with the SEC. This press release does not contain all of the information that should be considered concerning the proposed business combination and is not intended to form the basis of any investment decision or any other decision in respect of the proposed business combination. SEDA’s shareholders and other interested persons are advised to read, when available, the registration statement of the combined company and the proxy statement/prospectus which will form a part thereof and any amendments thereto and all other relevant documents filed or that will be filed in connection with the proposed business combination, as these materials will contain important information about cunova, KME Aerospace, SEDA, the combined company and the proposed business combination. The registration statement of the combined company and the proxy statement/prospectus which will form a part thereof and other documents that are filed with the SEC, once available, may be obtained without charge at the SEC’s website at www.sec.gov or by directing a written request to: SDCL EDGE Acquisition Corporation, 60 East 42nd Street, Suite 1100,
NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PRESS RELEASE, PASSED UPON THE MERITS OR FAIRNESS OF THE PROPOSED BUSINESS COMBINATION OR ANY RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PRESS RELEASE. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.
Participants in the Solicitation
SEDA, cunova, certain shareholders of SEDA, KME Group, and certain of SEDA’s, cunova’s, and KME Group’s respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from the shareholders of SEDA with respect to the proposed business combination. A list of the names of such persons and information regarding their interests in the proposed business combination will be contained in the registration statement of the combined company and the proxy statement/prospectus which will form a part thereof, when available. Shareholders, potential investors and other interested persons should read the registration statement of the combined company and the proxy statement/prospectus which will form a part thereof carefully when they become available and before making any voting or investment decisions. Free copies of these documents may be obtained from the sources indicated above, when available.
No Offer or Solicitation
This press release is for informational purposes only and shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed business combination. This press release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the applicable
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Investor and Media Contacts
Ned Davis
Chief Financial Officer
SDCL EDGE Acquisition Corporation
(917) 941-8334
ned.davis@sdclgroup.com
Francesca Lorenzini
Investor Relations Director
SDCL EDGE Acquisition Corporation
(512) 632-0292
francesca.lorenzini@sdclgroup.com
Financial Profiles, Inc.
Moira Conlon
mconlon@finprofiles.com
(310) 622-8220
Kelly McAndrew
(310) 622-8239
kmcandrew@finprofiles.com
Source: SDCL EDGE Acquisition Corporation
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