Tag Archives: Olli Isatalo

Alfa Laval targets industrial flow control market with Neles bid

Environmental, Metallurgy, Mineral processing, Mining consumables, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , ,

Less than two weeks into being a public entity, Neles has become the subject of a friendly takeover offer from Alfa Laval AB.

The two have entered into a combination agreement pursuant to which Alfa Laval will make a voluntary recommended public cash tender offer for all issued and outstanding shares in Neles that are not held by Neles or any of its subsidiaries, the two companies said.

The €11.50/share ($13/share) all-cash bid values Neles at around €1.7 billion, which is a 32.8% premium to the closing Neles share price on July 10.

Alfa Laval, a leading global provider of products and solutions based on its key technologies of heat transfer, separation and fluid handling, has identified the industrial flow control market as a key growth area, it said. The planned transaction enables it to considerably strengthen its presence in the large industrial flow control space where the company currently offers mainly energy efficiency solutions, they said.

“On the other hand, Alfa Laval believes there are several areas where being part of the Alfa Laval Group can make a significant contribution to the future development of Neles, such as leveraging Alfa Laval’s existing global platform,” it said.

Some of Alfa Laval’s products are used in the engineering sector, mining industry and refinery sector, treating wastewater and in creating a comfortable indoor climate.

Neles, which began trading on the Helsinki Stock Exchange on July 1 as part of Metso’s partial demerger and merger with Outotec, is a global leader in flow control solutions and services. The company’s valves and valve automation technologies are known for quality, reliability and highest safety, it says.

The members of the Board of Directors of Neles who participated in the decision-making process have unanimously decided to recommend the shareholders of Neles accept the tender offer, while Cevian Capital, which holds some 10.9% of the issued and outstanding shares in Neles, has on customary conditions irrevocably undertaken to accept the offer.

Alfa Laval will on or about August 13, 2020, publish a tender offer document with detailed information about the tender offer and information on how to accept it. The offer period is expected to commence on or about this date and to expire on or about October 22, 2020, unless the offer period is extended by Alfa Laval.

“Neles and Alfa Laval would create a larger and stronger global player in the flow control market,” they said. “As a combined company, Neles would become an integral part of Alfa Laval’s organisation structure while largely retaining its operational structure and strong identity within the Alfa Laval network.”

The combined company’s combined revenue for the 12 months ended March 31, 2020, was approximately SEK53.8 billion ($5.9 billion) and it had a combined total of some 20,300 employees globally on March 31, 2020.

“The transaction is expected to be earnings per share accretive for Alfa Laval beginning from the first year following the completion of the tender offer,” they said.

There are several areas where being part of the Alfa Laval Group can make a significant contribution to the future development of Neles, Alfa Laval says, with certain strategic opportunities including:

  • Leveraging Alfa Laval’s service network infrastructure of around 100 service centres globally;
  • Leveraging Alfa Laval’s automated warehouse presence in North America, Europe, and Asia in Neles’ global parts distribution. The set-up is well suited to Neles’ product range and can provide a world-class solution in the industrial flow market, it says; and
  • Acquisition growth: Alfa Laval has a long history of successful M&A transactions and the financial strength to support a meaningful acquisition program in the industrial flow market.

Commenting on the offer, Tom Erixon, President and CEO of Alfa Laval, said: “The proposed deal offers a strong industrial logic: our businesses complement each other well with very little overlapping operations. Alfa Laval has the resources to invest in and support the development of Neles for years to come, while our global service network offers Neles a ‘plug and play’-kind of platform. As an owner, Alfa Laval would be committed to the strategy and industrial plan of Neles while offering a powerful platform to enable future growth. The match is nearly perfect.”

Olli Isotalo, President and CEO of Neles, said: “We see this offer as clear evidence of the good, strong work done throughout the years. It means that Alfa Laval believes in and appreciates our strategy, products and, most of all, know-how of our people. We continue to be serving our customers and executing our strategy and are delighted to hear that Alfa Laval would support our endeavours.”

Neles aims for environmentally friendly valve production with new tech centre

Mineral processing, Mining consumables, Mining equipment, Mining services, , , , , ,

Neles, the valves focused spin off of Metso, has announced the start-up of operations at its new valve technology centre in Jiaxing, China.

The new plant strengthens Neles’ valve and related products production capabilities and increases availability for customers across various process industries, in China and globally, it said.

This is the first major announcement from the company since it became a new entity with the partial demerger of Metso (into Neles) and the merger of Metso and Outotec to become Metso Outotec.

The greenfield investment in China to respond to the growing demand of reliable valve technologies was announced back in October 2018.

Olli Isotalo, President and CEO of Neles, said: “This is an important strategic addition to Neles’ global manufacturing footprint and good news for our valve customers around the world. With this investment, our target is to further improve our service and delivery capabilities to meet the diverse and evolving needs of our customers.”

Jiaxing’s manufacturing layout is designed with the latest technologies for efficient and environmentally friendly mass production of high-volume standard valve products, Neles said.

Kevin Tinsley, Head of Valve Operations at Neles, said the principle has been to ensure the most reliable and emission-free production processes from the new plant.

“For example, the liquid recycling system at Jiaxing allows reusing 95% of the liquids used in machining or testing processes and thus minimising formation of hazardous substances,” he said.

“Also, the Regenerative Thermal Oxidizer in use allows as much as 99% organic compound free painting process.”

The new plant will produce over 100,000 valves per year, according to the company.

“With access to a variety of competitive logistic options, the products from Jiaxing can be shipped to customers or Neles supply centres around the globe with dramatically improved lead times,” it added.

In addition to Jiaxing, Neles’ valve technology centre in China in the Waigaoqiao Free Trade Zone in Shanghai continues operations, focusing on highly engineered products.

Neles employs around 400 flow control specialists at four main locations in China, serving all process industries.

Isotalo concluded: “China is an extremely important market for our business. The new technology centre will have a key role in strengthening our R&D capability in China as well as our global footprint and position as a leading provider of reliable flow control solutions.”

Today, Neles has valve technology or production centres around the world in North America, Germany, Finland, South Korea, Saudi Arabia and India.

Metso splits Flow Control and Minerals business

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Metso says it has decided to develop the businesses of the Minerals and Flow Control segments separately, with the latter business area appointing Olli Isotalo as President.

Metso’s Board of Directors said it had defined its view on the company’s portfolio strategy and decided that the businesses under the Minerals and Flow Control segments will be further developed separately from each other, the company said.

”All Metso’s businesses and the two segments that are composed of these, have attractive growth opportunities in the coming years,” Metso’s President and CEO, Pekka Vauramo, said. “Capitalising on these opportunities will call for efficient decision-making and allocation of resources.

“However, our businesses have significant differences relating to, for example, customers, cyclicality, growth drivers, sales channels and product development. This is why we made the decision to develop Minerals and Flow Control strategies separately from each other.

“In addition, Minerals and Flow Control share a limited amount of synergies, the majority of which are administrative, thus the separation will make the preparation and implementation of their respective strategies more efficient.”

The Minerals segment includes equipment and services sold to mining and aggregates customers, as well as the recycling business. The Flow Control segment consists of valves and related services sold to various process industries.

The new President of the Valves business area, Olli Isotalo, will come on board on July 15, Metso said. He will also become a member of the Metso Executive Team.

Isatalo has previously served as CEO of Patria Oyj and has held various executive positions at Cargotec Corp, Metso said.

Vauramo said: “I am very pleased that we can utilise Olli Isotalo’s expertise and experience in preparing and further implementing the strategy of the Valves business.”

Isatalo said: “I am excited to join the Valves business area, which has consistently reported good results and has seen overall strong development over the past years. I eagerly look forward to developing a new strategy and creating new growth opportunities for Valves together with its skilled and motivated personnel.”

John Quinlivan, the current President of the Valves business area, will continue as Senior Adviser until the end of 2019 and will support Olli Isotalo during the transition period, Metso said.