Ekokem to be acquired by Fortum – development towards the leadership in circular economy continues; total purchase price 700 million euros

05/27/2016

Ekokem to be acquired by Fortum – development towards the leadership in circular economy continues; total purchase price 700 million euros

Fortum Corporation and the four biggest owners of Ekokem Corporation have announced today that they have signed an agreement whereby Fortum will acquire their shareholdings in Ekokem. These four biggest owners are the Finnish State, the Association of Finnish Local and Regional Authorities, Ilmarinen Mutual Pension Insurance Company and the Helsinki Region Environmental Services Authority, HSY, who represent approximately 81% of the shares and voting rights. In total, Ekokem has about 400 shareholders.

The transaction will require competition authority clearances in Finland and in Sweden. Fortum estimates that the closing of the transaction will take place during the third quarter of 2016. Fortum has also announced that it will make a tender offer to all remaining shareholders at the same price (EUR 165 per share). The completion of the tender offer will be subject to Fortum obtaining the competition clearances and reaching a majority ownership in Ekokem. Having reached the necessary ownership thresholds, Fortum will proceed with a minority redemption process. The debt and cash-free purchase price for 100% of the company is EUR 700 million.

Ekokem's CEO Karri Kaitue: ”During the last years, Ekokem has grown from a Finnish company into a Nordic environmental management service group. Our growth has been profitable, and the market offers plenty of opportunities to grow the business further. One example of our current growth initiatives is the Circular Economy Village that is currently being built in Riihimäki and which will refine recycled plastics, biogas and energy, among other things, from mixed municipal waste.

In the beginning of this year, Ekokem’s Board of Directors initiated a capital structure assessment with the aim of ensuring resources in order to execute company’s strategy and to continue on growth path. I believe that as part of Fortum this target will be achieved and Ekokem’s success can continue. With the help of Fortum’s wider network and resources, we can also offer Ekokem’s services from a stronger platform in the future. I believe that Fortum will develop its circular economy business with Ekokem as the core.”

Pekka Lundmark, Fortum's President and CEO: "Ekokem is a first-class company with experienced management and personnel. Supported by Fortum’s competence in waste-to-energy and strong financial resources, a true Nordic circular economy champion will be formed. We see excellent international growth opportunities for the business and intend to invest in the further development of Ekokem’s solutions.”

 

Further information

Karri Kaitue, CEO, Ekokem Corporation, tel. +358 10 7551 220

Hanna Masala, SVP, strategy, IR and communications, Ekokem Corporation, tel. +358 10 7551 110

 

Background information:

Fortum briefly

Fortum's vision is to be the forerunner in clean energy. Fortum provides its customers with electricity, heat and cooling as well as other energy solutions. Fortum’s main markets are the Nordic and the Baltic countries, Russia, Poland and India. In 2015, Fortum employed some 8,000 people, and Fortum’s sales were EUR 3.5 billion. Fortum's share is listed on Nasdaq Helsinki.

Ekokem briefly

Ekokem is one of the leading circular economy companies in the Nordics which offers environmental management and material efficiency services. Ekokem operates the leading Nordic hazardous waste treatment plants and provides its customers with specialized environmental management know-how on a broad front. The company’s objective is to create value by improving customers’ material and energy efficiency. Ekokem offers recycling, utilization, and final disposal solutions as well as soil remediation and environmental construction services. For more than 35 years, Ekokem has contributed to saving natural resources and promoting the circular economy.

 

Fortum Corporation stock exchange release, May 27 2016