ACQUISITION OF CAST IRON BUSINESS FROM TEKSID S.P.A.
Joinville, December 20th, 2019 - Tupy S.A. ("Company", B3: TUPY3), pursuant to Article 157, Paragraph 4 of Federal Law No. 6.404 of December 15, 1976, ("Brazilian Corporates Law") and Brazilian Securities Commission ("CVM") Instruction No. 358 of January 3, 2002, both as amended and currently in effect, hereby advises its shareholders and the market in general that Tupy S.A. and Fiat Chrysler Automobiles N.V. ("Seller"), a company organized under the laws of the Netherlands, have entered into a Share Purchase Agreement for the acquisition of 100% of Teksids iron castings business ("Teksid"), including operations located in Brazil, Mexico, Poland, Portugal and China (joint venture in which Teksid holds a 50% stake) as well as its offices in the United States and Italy ("Transaction").
Teksid posted approximately EUR 526 million (five hundred and twenty-six million euros) of net operating revenue in 2018 and has approximately 6,000 employees.
The Transaction will provide several benefits and synergies, enhancing Company´s competitiveness, including: (i) pooling structures for R&D and technical knowledge in advanced manufacturing; (ii) harnessing the Companys competencies related to machining process for Teksids products, since it does not currently offer these services; (iii) possibility of reallocating manufacturing across their combined plants to benefit from the cyclical nature of the business; (iv) growing capacity to enable the Company to add new programs for the heavy vehicles, machinery & equipment segments; and (v) obtaining scale gains, operational efficiency and cost savings.
The acquisition price (Enterprise Value) is EUR 210,000,000 (two hundred and ten million euros) corresponding to approximately 4.9x Teksids projected EBITDA for 2019, to be paid after closing, subject to customary purchase price adjustments. In addition, Tupy will grant commercial bonuses and discounts, typical of the industry, in connection with the agreed long-term supply arrangements.
The Transaction is subject to approval by antitrust authorities in the competent jurisdictions, as well as verification of the usual conditions precedent for similar deals.
To access the complete version of the Material Fact, click here.
The Company will hold a conference call today, as shown below to provide details on the Transaction.
Conference call details: December 20th, 2019
09h00 - EST
11h00 - BRT
USA dial-in: +1 646 828 8246 / +1 646 291 8936
USA toll-free: +1 800 469 5743 / +1 800 492 3904
Brazil dial-in: (11) 3193 1001 / (11) 2820 4001
Access code: Tupy
For more information, please contact our IR Team:
Phone.: +55 (11) 2763-7844
This release may contain forward-looking statements subject to risks and uncertainties. Such forward-looking statements are based on the management’s beliefs and assumptions and information currently available to the Company. Forward-looking statements include information on our intentions, beliefs or current expectations, as well as on those of the Company’s Board of Directors and Officers. The reservations as to forward-looking statements and information also include information on possible or presumed operating results, as well as any statements preceded, followed or including words such as "believes", "may", "will", "expects", "intends", "plans", "estimates" or similar expressions. Forward-looking statements are not performance guarantees; they involve risks, uncertainties and assumptions because they refer to future events and, therefore, depend on circumstances which may or may not occur. Future results may differ materially from those expressed or suggested by forward-looking statements. Many of the factors which will determine these results and figures are beyond Tupy’s control or prediction capacity.