15th Dec 2005 07:13
Cookson Group PLC15 December 2005 15 December 2005 SALE OF COOKSON'S LAMINATES BUSINESS FOR US$91 MILLION Cookson Group plc ("Cookson"), the leading materials science company, announcesthat it has today entered into an agreement to sell its Laminates business ("Laminates") to Isola Group S.A.R.L, for US$91 million (£51 million*). IsolaGroup S.A.R.L. is ultimately owned by Texas Pacific Group. Completion of thetransaction, which is conditional on satisfactory clearance from the Europeancompetition authorities, is expected in February 2006. The purchase price willbe satisfied on completion by a combination of cash proceeds and an assumptionof net debt. The cash element of the price will be subject to completionbalance sheet adjustments in respect of working capital and capital expenditure,which are not expected to be material. Laminates, one of the three business sectors which comprise Cookson'sElectronics division, supplies laminates, prepregs and other substrate materialproducts for the manufacture of printed circuit boards under its trading name,Polyclad. The business comprises a group of companies with operations andproduction facilities in the USA, Europe and Asia-Pacific. On an International Financial Reporting Standards ("IFRS") basis, for the yearended 31 December 2004, Laminates generated a trading profit** of £2.5 millionon revenue of £132 million. As at 31 December 2004, Laminates had gross assetsof £126 million and gross liabilities of £45 million. For the six months ended30 June 2005, Laminates generated a trading loss* of £1.7 million on revenue of£65 million. As at 30 June 2005, Laminates had gross assets of £129 million,gross liabilities of £45 million and employed 1,585 people. The sale of Laminates is part of Cookson's strategy of focussing on highertechnology products and exiting commodity activities, as well as achievingprogressive debt reduction through, in part, non-core business disposals. InJanuary 2005, Cookson announced a target of raising over £100 million fromdisposal proceeds by the end of 2006. In the six month period to 30 June 2005,cash proceeds from disposals totalled £13 million. The net cash proceeds from the sale will strengthen Cookson's balance sheet andprovide greater financial flexibility. Additionally, Cookson will considermaking advanced payments into its UK pension scheme to reduce the existingdeficit. JPMorgan Cazenove acted as a financial advisor to Cookson for this transaction. Commenting on the sale, Nick Salmon, Chief Executive of Cookson Group plc, said: "The third quarter trading update, announced in early November, highlighted thesolid progress we are making in achieving the profitability targets announced atthe beginning of this year. This transaction represents a significant step inthe achievement of one of our other strategic objectives, progressive debtreduction. "Whilst we have recently been successful in returning the Laminates business tobreak-even, it has for too long had a detrimental impact on the earnings profileof our Electronics division, and its disposal is the right thing for thatdivision and for the Group as a whole. "As a result of this transaction and others concluded during the course of theyear to date, we are now nearly two thirds of the way towards our strategic goalof raising over £100 million through disposals by the end of 2006. We remainconfident of achieving that goal." Notes: * translated at an exchange rate of US$1.77/£1 ** trading profit consists of profit from operations before central Group andDivisional cost allocations, rationalisation costs, amortisation and impairmentof intangible assets and profit/(loss) relating to fixed assets Note to editors: In January 2005, Cookson announced its strategy which focuses on performanceenhancement, debt reduction and the disposal of non-core activities. Cookson's objectives include improving profitability, with targeted return onsales by 2007 of 10% in both the Ceramics and Electronics divisions and a returnon net sales value (i.e. excluding the precious metals content) of 15% for thePrecious Metals division. Cookson also plans to reduce total debt significantlyover the next 2-3 years. This will be achieved through a combination of strongoperational cash flow - from improved profitability and working capitalmanagement - and a disposal programme which aims to raise over £100 million fromthe sale of a number of non-core activities and assets by the end of 2006. Inaddition, Cookson intends to resume a sustainable dividend payment as soon aspossible with dividends funded from free cash flow. Shareholder/analyst enquiries:Nick Salmon, Chief Executive Cookson Group plcMike Butterworth, Group Finance Director Tel: + 44 (0)20 7061 6500Isabel Vilela, Investor Relations Manager Media enquiries:John Olsen Hogarth Partnership Tel: +44 (0)20 7357 9477 About Cookson Group plc Cookson Group plc is a leading materials science company which providesmaterials, processes and services to customers worldwide. The Group's operationsare formed into three divisions - Ceramics, Electronics and Precious Metals. The Ceramics division is the world leader in the supply of advanced flow controland refractory products and systems to the iron and steel industry and is also aleading supplier of specialist ceramics products and refractory linings to thesteel, glass, foundry and other industries. The Electronics division is a leading supplier of materials and services tofabricators and assemblers of printed circuit boards and semiconductor packagingand to industrial markets including automotive and construction. The Precious Metals division is a leading supplier to the jewellery industry offabricated precious metals products. Headquartered in London, Cookson employs some 16,000 people in more than 35countries and sells its products in over 100 countries. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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