Alfa Laval Expands its Portfolio with Cryogenics Acquisition
Alfa Laval Signs Agreement for Fives Cryogenics Business
Alfa Laval has officially signed a binding put-option agreement to acquire the Fives Cryogenics business unit. This strategic move, valued at EUR 800 million, is set to enhance Alfa Laval's capabilities in heat transfer and pump technologies. The acquisition will proceed following the necessary consultations with relevant works councils and the establishment of a definitive purchase agreement.
The Importance of Cryogenic Technologies
Cryogenic technologies play a vital role in the energy sector, particularly for liquefied natural gas (LNG) and emerging applications like hydrogen and carbon capture. Fives Cryogenics boasts over 60 years of expertise in designing and manufacturing cryogenic heat exchangers and pumps tailored for gas liquefaction. With manufacturing facilities located in several countries, including France, China, and Switzerland, Fives Cryogenics employs over 700 professionals and reported revenues of approximately EUR 200 million last year.
Future Revenue Projections
Looking ahead, Fives Cryogenics is projected to generate revenue between EUR 200 million and EUR 250 million. This acquisition is anticipated to positively impact Alfa Laval's margin, reflecting the strategic importance of integrating Fives Cryogenics into their operations.
Comments from Leadership
Tom Erixon, President and CEO of Alfa Laval, stated, "Adding cryogenic technologies to our portfolio allows us to further enhance energy efficiency and drive progress in the energy transition. We believe Fives Cryogenics will add significant value, leveraging its deep technological expertise in cryogenics within our robust market presence in gas solutions." Erixon emphasizes the synergy between the two companies, anticipating significant potential for growth and innovation.
Fives Group's Perspectives
Frédéric Sanchez, CEO of Fives Group, shared his perspective on the acquisition, noting, "Being part of an industrial group with profound technological knowledge and a global presence will greatly benefit Fives Cryogenics. Alfa Laval represents a strong partnership that will ensure the future development of our company and its talented team." The organizational integration of Fives Cryogenics will occur within Alfa Laval's Energy Division, functioning as a separate business unit.
Transaction Timeline and Financial Details
The closing of this transaction relies on regulatory approvals, expected to happen during the upcoming year. The purchase will be fully funded through existing liquidity and debt financing. Jefferies has been appointed as the financial advisor, while White & Case will serve as the legal advisor to Alfa Laval during this process.
About Alfa Laval
Alfa Laval has a long history of innovation, spanning 140 years, and operates in over 100 countries. The company specializes in heat transfer, separation, and fluid handling technologies that significantly contribute to essential global industries. Providing solutions that aid in energy efficiency and sustainability is a core commitment of the company. In 2024, Alfa Laval achieved annual sales of SEK 66.9 billion (approximately EUR 5.8 billion) and is continuously seeking to support customers in achieving their business objectives while addressing sustainability challenges.
Frequently Asked Questions
What is the significance of the acquisition?
The acquisition enhances Alfa Laval's expertise in cryogenics and boosts its energy efficiency offerings, targeting critical sectors like LNG and hydrogen.
Who will manage Fives Cryogenics post-acquisition?
Fives Cryogenics will operate within Alfa Laval's Energy Division as a separate business unit, ensuring focused management of its operations.
What are the future revenue expectations for Fives Cryogenics?
Fives Cryogenics is projected to generate revenue between EUR 200 million and EUR 250 million post-acquisition.
When is the expected closing date for the transaction?
The transaction is anticipated to close in 2025, pending regulatory approval.
What is Alfa Laval's market focus?
Alfa Laval focuses on providing heat transfer, separation, and fluid handling technologies to promote sustainability and efficiency across various industries.
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