Stock Exchange Releases
*Tulikivi Corporation significantly increases its market share in
fireplaces by acquiring all the shares in Kermansavi Oy.
*The transaction substantially rounds out Tulikivi’s product range
and enlarges its clientele.
*The acquisition generates synergy benefits, supplements
distribution channels in Finland and opens up export markets for
Tulikivi, well known as a manufacturer of soapstone fireplaces, is
bolstering its position as the market leader in heat-retaining
fireplaces by acquiring Kermansavi Oy, whose main business is the
manufacture of tiled stoves. Kermansavi’s share of the Finnish
market for branded fireplaces is ten per cent. Tulikivi’s domestic
market share will thus rise to over 30 per cent. The data is based
on Rakennustutkimus RTS Oy’s fireplace market report for 2005.
The acquisition of Kermansavi Oy is in line with Tulikivi’s growth
strategy. Tulikivi aims to achieve annual organic growth of over
five per cent and to enlarge its business to new customer groups
The acquisition significantly rounds out Tulikivi’s product range
and increases its potential clientele. It also yields major
synergy benefits for the Group and establishes a new distribution
channel for Tulikivi in Finland. Tulikivi’s current distribution
channels in export markets in turn make it possible to start up
sales of ceramic products abroad.
The acquiree, Kermansavi Oy, is a family company established in
1976 and owned by Ilkka Paatero and his children. Kermansavi Oy’s
business operations comprise the design, manufacture and sale of
tiled stoves as well as domestic and decorative stoneware, along
with the installation of stoves. The company’s production
facilities are located in Heinävesi.
In 2005, Kermansavi Oy had revenue of about EUR 16 million, of
which tiled stoves accounted for about 70 per cent. The share of
revenue generated by stoves is rising vigorously and will amount
to close to 80 per cent this year. Kermansavi Oy’s profit before
taxes was EUR 1.5 million and its net profit EUR 1.1 million. The
balance sheet total was EUR 8.6 million at the turn of the year.
Kermansavi Oy has about EUR 2.6 million in interest-bearing
liabilities. At present, Kermansavi Oy has about 130 employees.
They will transfer into the Tulikivi Group’s employ under their
current terms of employment. The Tulikivi Group’s total payroll
will thus increase to approximately 650 people.
“The acquisition of Kermansavi is a major step in the
implementation of Tulikivi’s growth strategy. Together with the
new generation of Tulikivi fireplaces, the acquisition
significantly bolsters our position as the global market and
technology leader in heat-retaining fireplaces,” says Tulikivi
Corporation’s Managing Director Juha Sivonen.
“Kermansavi’s future is in fireplaces and it has a strong brand. I
believe that, with Tulikivi’s help, our products will find their
way into export markets, too. As a company from Eastern Finland,
Tulikivi is a good home for Kermansavi,” says Ilkka Paatero, who
sold Kermansavi Oy.
A EUR 13 million transaction
The selling price was EUR 13.1 million, of which EUR 11 million
was paid in cash and the remainder will be paid by transferring
about 179,000 (before the split) Series A shares in Tulikivi
Corporation after a share issue decision is made. In the
transaction, the former owners of Kermansavi will receive a total
holding of less than 2 % in Tulikivi.
The deal will have a slightly positive effect on the consolidated
result and key figures in 2006. As from 2007, the effect on
earnings will be significantly positive. The solvency of the
Tulikivi Group will remain good.
The right of ownership and possession to Kermansavi Oy’s shares
was transferred to Tulikivi Corporation upon the signing of the
agreement on 3 April 2006.
For additional information, contact: Tulikivi Corporation, 83900
Juuka, tel. +358 207 636 000, www.tulikivi.com
– Chairman of the Board Matti Virtaala and Managing Director Juha
Distribution: – Helsinki Stock Exchange, – Principal media
Tulikivi Corporation and its subsidiaries form the Tulikivi Group,
the world’s largest and most technologically advanced processor of
soapstone and the world’s largest manufacturer of industrially
produced heat-retaining fireplaces. Before the acquisition, the
Group had revenue of about EUR 60 million. The Group owns six
production plants and employs more than 500 people.