Hexagon Composites announces sale of Hexagon Ragasco to Worthington Enterprises and acquisition of 49% of Worthington Enterprises' Sustainable Energy Solutions business segment
Hexagon Composites announces the sale of Hexagon Ragasco to Worthington Enterprises and the acquisition of a 49% stake in Worthington's Sustainable Energy Solutions (SES) business segment. The sale of Hexagon Ragasco, valued at NOK 1,050 million, may adjust based on 2024 performance, ranging from a decrease of NOK 50 million to an increase of NOK 100 million. Hexagon Ragasco, a leader in LPG composite cylinders, will now be part of Worthington Enterprises. Concurrently, Hexagon acquires a 49% stake in SES for USD 20 million. SES is a major supplier of high-pressure cylinders and systems, reporting EUR 127 million in revenue and EUR 2.9 million in adjusted EBITDA in 2023. Hexagon sees these transactions as part of a strategic focus on high-pressure, clean energy solutions.
- Sale of Hexagon Ragasco at NOK 1,050 million, potentially adjustable up to NOK 100 million.
- Acquisition of 49% stake in SES for USD 20 million.
- SES reported EUR 127 million in revenue and EUR 2.9 million adjusted EBITDA in 2023.
- Transaction supports Hexagon's strategic focus on clean energy solutions.
- Hexagon Ragasco expected to grow in new geographies and verticals.
- Partnership with Worthington Enterprises, a respected industry player.
- Sale of Hexagon Ragasco may decrease by NOK 50 million based on performance.
- Partial acquisition of SES may not provide full control over the business segment.
- SES adjusted EBITDA of EUR 2.9 million indicates tight profit margins.
- Strategic review process lasted several months, which may indicate internal uncertainties.
Insights
The sale of Hexagon Ragasco to Worthington Enterprises for an enterprise value of
From a financial viewpoint, the divestment allows Hexagon Composites to focus resources on higher-growth segments, potentially driving future earnings growth. The acquisition of a 49% stake in Worthington's SES business for
An investor should note that these transactions could lead to short-term volatility but are geared towards long-term value creation. If Hexagon Composites efficiently integrates and leverages the SES business, it could enhance their market share in the clean energy space.
The transfer of Hexagon Ragasco to Worthington Enterprises aligns with current market trends where companies are realigning their portfolios to focus on core competencies. Hexagon Ragasco's strong presence in over 100 countries provides Worthington with a significant market expansion opportunity. This acquisition allows Worthington to blend Hexagon Ragasco’s innovative composite cylinder technology with its existing LPG and refrigerant gas cylinder offerings, potentially strengthening its market leadership in these segments.
For Hexagon Composites, the acquisition of a 49% stake in SES, a leader in high-pressure cylinders for clean energy storage and distribution, strategically positions them in the fast-expanding hydrogen and CNG markets. This move reflects broader industry dynamics, where companies are ramping up investments in sustainable and clean energy solutions, driven by global energy transition goals.
Retail investors should consider the potential for enhanced market positioning and growth in the clean energy sector, balanced by the risks associated with integrating new business units and market uncertainties.
The acquisition of Worthington's SES business segment illustrates Hexagon Composites’ commitment to advancing in the clean energy technology arena. SES’s expertise in high-pressure cylinders and systems for compressed natural gas and hydrogen positions Hexagon to leverage cutting-edge advancements in energy storage and distribution. This is important as global demand for hydrogen and CNG solutions is expected to surge, driven by decarbonization efforts and regulatory policies.
Technologically, this acquisition allows Hexagon to tap into SES's high-pressure solutions, potentially fostering innovation and expanding their product portfolio. For investors, this integration could mean a more diversified and resilient company, capable of addressing a broader range of energy needs in an evolving market landscape.
However, the success of this acquisition will heavily rely on Hexagon’s ability to integrate SES’s technology and operations seamlessly while maintaining their innovation trajectory.
Sale of Hexagon Ragasco
Worthington Enterprises will acquire
Hexagon Ragasco is the market leader in LPG composite cylinders used for leisure, household, and industrial applications with production in
"Hexagon Ragasco has been an important part of the Hexagon Group' for over 20 years, and we take great pride in the position the company has developed to date. Worthington Enterprises is a highly respected player in our industry. This transaction will enable Hexagon Ragasco to grow in new geographies and verticals," says Jon Erik Engeset, CEO Hexagon Composites.
"Hexagon Ragasco is one of the pioneers of the composite cylinder," said Jimmy Bowes, president, Building Products, Worthington Enterprises. "Now for more than 20 years, they've been bringing innovative products to the market that are raising expectations of the performance, quality and capabilities of an LPG cylinder. We've followed their growth closely and believe that their composite cylinders are a great complement to our existing cylinder business. We can't wait to get started with the exceptional team at Hexagon Ragasco."
The sale of Hexagon Ragasco is expected to close on or around 3 June. Today's announcement concludes the strategic review initiated by Hexagon in September 2023.
Acquisition of a non-controlling stake in Worthington's SES business segment
Combined with the sale of Hexagon Ragasco, Hexagon Composites has signed an agreement to acquire a
"Through our dialogue with Worthington on the sale of Hexagon Ragasco, we identified an opportunity for Hexagon within Worthington's Sustainable Energy Solutions (SES) business. Together, these transactions support Hexagon's strategic focus on high pressure, clean energy solutions" says Engeset.
The acquisition of a
DNB Markets and Danske Bank acted as financial advisors, and Schjødt and Saxinger Rechtanwalts acted as legal advisors, to Hexagon Composites on the transactions.
For more information:
Karen Romer, SVP Communications, Hexagon Composites ASA
Telephone: +47 950 74 950 | karen.romer@hexagongroup.com
Ingrid Aarsnes, VP Investor Relations and ESG, Hexagon Composites ASA
Telephone: +47 950 38 364 | ingrid.aarsnes@hexagongroup.com
About Worthington Enterprises
Worthington Enterprises (NYSE: WOR) is a designer and manufacturer of market-leading brands that help enable people to live safer, healthier and more expressive lives. The Company operates with three business segments: Building Products, Consumer Products and Sustainable Energy Solutions. Worthington's emphasis on innovation and transformation extends to building products including heating and cooling solutions, water systems, architectural and acoustical grid ceilings and metal framing and accessories, and consumer products in tools, outdoor living and celebrations categories sold under brand names Balloon Time®, Bernzomatic®, Coleman®, Garden-Weasel®, General®, HALO™, Hawkeye™, Level5 Tools®, Mag Torch®, Pactool International® and Well-X-Trol®. The Company serves the growing global hydrogen ecosystem through on-board fueling systems and gas containment solutions. Headquartered in
Founded in 1955 as Worthington Industries, Worthington Enterprises follows a people-first Philosophy with earning money for its shareholders as its first corporate goal. Worthington Enterprises achieves this outcome by empowering its employees to innovate, thrive and grow with leading brands in attractive markets that improve everyday life. The Company engages deeply with local communities where it has operations through volunteer efforts and The Worthington Companies Foundation, participates actively in workforce development programs and reports annually on its corporate citizenship and sustainability efforts. For more information, visit worthingtonenterprises.com.
About Hexagon Ragasco
At Hexagon Ragasco we are committed to quality, safety, and innovation. We are the leading manufacturer of composite LPG cylinders with an industry-leading safety record of 20+ years and more than 20 million cylinders sold worldwide. Our products bring unique benefits to both LPG marketers and their customers.
LPG has a significant role to play as a transitional energy source with the potential to improve air quality and health for billions of people who rely on highly pollutant and toxic fuels as primary energy. We believe in cleaner air and safer LPG for everyone, everywhere.
Learn more at www.hexagonragasco.com and follow @Hexagon_Ragasco on X and LinkedIn.
About Hexagon Composites
Hexagon Composites (OSE: HEX.OL) is a world leader in composite cylinder technology and related systems that delivers safe and innovative solutions for a cleaner energy future. Our solutions enable storage, transportation, and conversion to clean energy in a wide range of mobility, industrial and consumer applications.
Learn more at hexagongroup.com and follow @HexagonASA on X and LinkedIn.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. This stock exchange release was published by Ingrid Aarsnes, VP IR & ESG, Hexagon Composites ASA on 29 May 2024 at the time stamp of this release.
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