Mass Media Overview
Moscow Russia - Severstal unit buys Italian wire-rope producer Redaelli Tecna
03.09.2008 11:36
http://www.wirelinks.com August 10th
Severstal-metiz Group, Severstal's steel wire and wire products division, announced Monday that it had acquired Italian-based wire-rope producer Redaelli Tecna, as cash-heavy Russian metals firms look to expand abroad. The value of the deal was not disclosed, but analysts estimated it at 60 million euros to 100 million euros ($93 million to $156 million). The companies said synergies would allow them to save 10.3 million euros ($16 million) over the next five years. Severstal said it would help the Italian firm to distribute in the former Soviet Union, while Redaelli said it would bring the Russian side closer to its European customers.
"The acquisition of Redaelli will allow our company to widen our products line and widen our distribution capacities," Severstal-metiz chief Olga Naumova said in a news conference via video link from Italy.
Redaelli chief Maurizio Prete said the company needed Severstal to boost capacity. "We have lots of orders and are now eight to nine months late with our clients because we do not have enough capacities to produce," he said. "I hope that we will be able to meet that demand with the help of our new Russian partners."
Redaelli is a "very profitable" company that will provide Severstal with much-needed expertise, said Yevgeny Bulanov, a metals analyst with CIG investment group.
"Redaelli has very good profitability with an EBITDA of 15.7 percent, which is a rarity for a Russian hardware-producing company," he said, estimating the value of the purchase at 60 million euros.
"Severstal-metiz aims to produce products with more added value, and for this reason it needs Redaelli's technologies," Bulanov said.
Alfa Bank metals analyst Maxim Semenovykh said Severstal paid up to 100 million euro for the company.
In the deal, RTS-traded Severstal-metiz bought 100 percent of the privately held Redaelli, including its production, technological, center and distribution divisions. Severstal-metiz's shares closed unchanged Monday.