Dec. 12, 2018

LU-VE S.p.A. has signed an agreement to acquire Alfa Laval Group’s commercial/industrial air heat exchanger business

For the last 12 months ending June 2018 Alfa Laval Air Heat Exchangers Division had revenues of € 97.8 million; with this acquisition, LU-VE will be amongst the three largest global operators in the sector.

Uboldo, 12 December 2018 – LU-VE S.p.A. (“LU-VE”) announces the signing of a binding framework agreement for the acquisition of Alfa Laval Group’s commercial/industrial air heat exchanger business (“AL Air ”).

LU-VE , whose shares were admitted to trading on the Italian stock exchange in June 2017, is one of the main European producers of air heat exchangers and ventilated products for the refrigeration, air conditioning and industrial process cooling markets, with production facilities in Europe, Russia, China, USA and India.

Alfa Laval Group is a world leader in heat transfer, centrifugal separation and fluid handling, active in the production and commercialization of air heat exchangers through AL Air.

For the last 12 months ending June 2018 AL Air had revenues of € 97.8 million , with an EBITDA of € 7.5 million and an EBIT of € 6.4 million. AL Air will be acquired on a cash and debt free basis.

AL Air, headquartered in Alonte (Vicenza) owns well recognized historical brand names such as Fincoil and Helpman and has productive premises in Italy, Finland and India with a commercial organization throughout the world. The acquisition shall be finalized through local binding agreement at closing, and will include the transfer of about 400 employees mainly based at the production sites. It is foreseen that the employees will continue their employment in the LU-VE Group as per the closing date of the transaction.

For the LU-VE Group the AL Air business will be a valuable complement with limited overlaps to the existing portfolio. This will create new growth opportunities for the near and long-term future.

The transaction entails a value for the AL Air calculated on the basis of its EBITDA 2018, and shall be paid for the 65% at closing, for the 15% one year after the closing date and for the remaining 20% two years after the closing date, adjusted on the basis of average EBITDA 2019-2020 of the transferred business; alternatively, should LU-VE opt to anticipate last payment, on the basis of average EBITDA 2018-2019. Based on the data available at present and to the previsions made by the parties, the whole envisaged price for the transaction should be between € 66.0 million and € 67.0 million, to be paid by LU-VE with available cash.

The transaction is subject to customary closing conditions and it is expected that the closing, with the signature of local binding agreement, would occur in the first half of 2019.

The President of LU-VE Iginio Liberali says: “ This acquisition fits perfectly into the strategic design of growth and qualification of the LU-VE Group. Thanks to it, the Group is now amongst the three largest global operators in the sector. This acquisition reinforces our ability to offer services and components of high quality and reliability (performances certified by Eurovent).

We are strengthening our avant-garde position in the advancement of our sector, in terms of Research and Development synergies, coverage of international markets, use of cutting-edge products and manufacturing technologies in the commercial refrigeration, industrial, air conditioning and power generation sectors.

This acquisition also has the sense of maintaining in our country the research and manufacturing of the most advanced products, in terms of the application of "green" refrigerants, energy savings and respect for the environment ”.

This business has made big improvements the last two years both in terms of growth and profitability ,” says Tom Erixon, President and CEO of the Alfa Laval Group. “ However we came to the conclusion it would have even better opportunities to continue developing under the ownership of the LU-VE Group. LU-VE is a solid player who is driving front-end technologies within HVAC and the refrigeration. The air heat exchangers will be a valuable complement to their current portfolio .”

A presentation of AL Air and of the operation will be made available on the internet site of the company at the address www.luvegroup.com – Section “Investor relations” – “Financial highlights” – “ 2018”. It will be explained by the Managing Directors of LU-VE during a conference call to be organized next December 14th, at 10.00 a.m..

BNL - BNP Paribas and MGPE S.r.l. acted as financial advisors to LU-VE while Studio Biscozzi Nobili and acted as the legal advisors.