YIT To Buy MC's building system service operations in Germany, Austria, Poland, the Czech Republic, Hungary and Romania
30 May 2008
YIT Corporation and MCE AG have signed an agreement on the sale of MCE's building system service business in Germany, Austria, Poland, the Czech Republic, Hungary and Romania to YIT on May 29, 2008. The value of the acquisition is EUR 55 million. The amount to be paid in cash in the transaction will be specified further when the deal is closed, once the net debt of the acquired operations has been deducted from the value of the acquisition. The completion of the transaction is subject to approval by competition authorities. It is estimated that the acquisition will be completed by July 31, 2008.
After signing the contract: Ludger Kramer (MCE), Hannu Leinonen (YIT), Josef Mayböck (MCE)
The operations acquired by YIT provide a broad range of services in the field of building systems and their maintenance and operation. The purchased operations employ about 1,900 people. Revenue for 2007 amounted to EUR 355 million. Of the revenue, slightly over 40% was generated in Germany, slightly over 40% in Austria, and the remaining approximately 15% in Poland, the Czech Republic, Hungary and Romania. The acquired operations complement YIT's services, and the transaction is not expected to result in personnel reductions.
The purchase of the operations is part of YIT's strategy to expand its offering of building system services geographically. As a result of the transaction, YIT will expand its operations to six new countries. Geographical expansion aims at gaining a position in new markets, creating opportunities for profitable growth and maintaining a balanced business structure by increasing low capital intensive services.
- The transaction gives a foothold in new markets and provides opportunities for growth. We continue to steer the acquired operations towards long-term service agreements and upkeep and maintenance works. The aim is to improve the profitability. We have a good track record of similar business and profitability development from acquisition of ABB's building system operations in 2003, comments Hannu Leinonen, President and CEO of YIT Corporation.
The purchased business will form a new division within YIT's Building Systems business segment. Karl-Walter Schuster (58), currently head of MCE's Building Technology Division, will be appointed as head of the new division. Following the transaction, the Building Systems business segment will account for about half of YIT Group's revenue. Geographically, the purchased operations account for approximately 9% of the Group's revenue.
The transaction will not change YIT Group's outlook for 2008. In its Interim Report on 25 April 2008, YIT estimated that the revenue and profit before taxes for 2008 will increase compared to the previous year.
For further information, please contact:
Petra Thorén, Senior Vice President, Investor Relations,
YIT Corporation, +358 40 764 5462, petra.thoren@yit.fi
Juhani Pitkäkoski, President,
YIT Building Systems Ltd, +358 400 451 644, juhani.pitkakoski@yit.fi
