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Arbonia AG / Key word(s): Disposal
Arbonia divests the Climate Division for EUR 760 million to Midea
18-Apr-2024 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
Arbon, Switzerland, 18 April 2024 - After the conclusion of a competitive sales process with several bidders, Arbonia
has decided to divest the Climate Division to Midea Electrics Netherlands B.V., a company of Midea Group for an
enterprise value of EUR 760 million. Subject to the approval of relevant regulators, up to CHF 400 million of the sales
proceeds are to be returned to the shareholders after completion of the transaction. In addition, net sale proceeds
will be used to strengthen the doors business and to reduce net debt. The doors business will strategically be further
developed both organically and through acquisitions, with the objective of making Arbonia a European market leader for
doors made of wood and glass.
Arbonia has signed an agreement to divest the Climate Division to Midea Electronics Netherlands B.V., a subsidiary of
the globally operating Midea Group (Midea) from China, which is listed on the stock exchange. The enterprise value of
EUR 760 million corresponds to a normalised EBITDA multiple of around 12x based on the expected EBITDA for the
financial year 2024, in line with precedent transactions for the industry. It should be noted in addition to the
purchase price that, inter alia, the non-operating real estate of the Climate Division will not be part of the
transaction and remain with Arbonia.
The Climate Division develops and produces products and systems for sustainable heat and cold generation, heat and cold
distribution, as well as for ventilation and air filtration. The division includes the system brands KERMI, PROLUX,
SABIANA and VASCO as well as the focused brands arbonia, Britec, Brugman, Cicsa, PZP, Solius, Superia, Tecna, and
Termovent. Midea plans to continue to invest in the Climate Division's existing sites, employees, and R&D capabilities.
These brands are therefore to remain in the future and be further expanded.
The Clivet Group, which is also part of the Midea Group and based in the northern Italian region of Veneto, is a
leading European company in the planning, manufacturing and sale of systems for climate, heating as well as air renewal
and purification. The company offers a wide range of solutions for the residential, service, and industrial sectors.
The combination of Clivet Group with the Climate Division will create a European leader for climate solutions. The
combined group will develop sustainable and innovative solutions for home comfort and energy efficiency and thus drive
forward the sustainable energy transition in the building sector. The combined group will benefit from a complementary
product portfolio, an existing dealer and installer network, supply chain efficiencies as well as a strategic alliance
with Midea Group.
The transaction is subject to the required approvals by relevant regulators. The closing of the transaction is expected
in the second half of 2024.
Use of funds
The Board of Directors intends to distribute a part of the proceeds to the shareholders of Arbonia AG. Following the
reduction of net debt, it will propose a distribution of around CHF 280 million in the form of a nominal value
repayment of CHF 4.00 per share as part of an Extraordinary General Meeting. The nominal value would decrease from
previously CHF 4.20 to CHF 0.20 per share as a result of the repayment. This nominal value repayment would presumably
be tax-free for the majority of Arbonia shareholders.
As announced, the Board of Directors intends to propose an ordinary dividend payment of CHF 0.30 per share for the 2023
financial year at the Extraordinary General Meeting; as in previous years, half of the amount would be contributed from
capital contribution reserves and the other half from retained earnings.
Following the ordinary dividend and nominal value repayment, the Board of Directors intends to launch a share buyback
programme to reduce the share capital by up to 6,900,000 shares (10 % of the share capital).
Thanks to the strong balance sheet with a very high equity ratio and low net debt after allocation of EUR 200 million
to the Doors Division for both organic and acquisition-related growth initiatives, the strategic flexibility and
development of the Doors Division is ensured.
Future orientation of Arbonia
With this transaction, Arbonia is focusing its strategy on its doors business. The Doors Division continues to work
towards the goal of expanding its leading position as a Central and Eastern European supplier of wooden doors and glass
solutions. Based on the largely complete investment programme for capacity and productivity increases as well as by
increasing market shares in its domestic and neighbouring target markets, the division is aiming for above-average
market growth in the future. Building on the investments made as well as with the aid of digital solutions, the
division is positioning itself as an innovative full-range supplier. Firstly, it will continue growing organically, and
secondly, it will make acquisitions that will help to establish a broader position both geographically and with regards
to product variety. This leads to an investment case with a medium-term revenue target of around CHF 900 million with
an EBITDA margin of 15 % and high free cash flows. Further KPIs will follow at the Capital Markets Day to be held
before the closing of the transaction.
Advisors
Jefferies and UBS are acting as joint financial advisers, and Baker McKenzie is acting as the legal advisor for
Arbonia. Goldman Sachs is acting as exclusive financial advisor, and Freshfields Bruckhaus Deringer LLP is acting as
legal advisor, to Midea Group.
Contact
Fabienne Zürcher
Head Corporate Communications & Investor Relations
T +41 71 447 45 54
fabienne.zuercher@arbonia.com

News Source: Arbonia AG  
End of Inside Information  
Language:     English 
Company:      Arbonia AG 

Amriswilerstrasse 50
9320 Arbon
Switzerland

Phone:        +41 71 447 41 41 
E-mail:       holding@arbonia.com 
Internet:     www.arbonia.com 
ISIN:         CH0110240600 
Listed:       SIX Swiss Exchange 
EQS News ID:  1883183 

End of Announcement EQS News Service
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1883183 18-Apr-2024 CET/CEST

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April 18, 2024 01:00 ET (05:00 GMT)