Olex employs 910 people with annual revenue of 330 million euros at current metal price (240 million euros using Nexans' constant metal rate, in accordance with the method used by Nexans for neutralizing the effect on sales of variations in the price of non-ferrous metals) in 2006 and an EBITDA ratio at constant metal price of more than 15% (fiscal year ended at June 30, 2006). Olex has three manufacturing sites based in Tottenham and Lilydale in Australia, and in New Plymouth in New Zealand, and a dozen sales offices in Australia, New Zealand, Singapore and China. The company's activities are divided between markets for cables for power network infrastructure (33%), specialty cables for industry such as mining (24%), and cables for the building sector, both energy and telecom (43%).
"This acquisition is in line with our strategy to expand in the Asia-Pacific area, a fast-growing area, and strengthens the geographical rebalancing of our Group. The percentage of Nexans' sales made in this area will almost double from 6% to 11%", said Gérard Hauser, Nexans' Chairman and CEO. "This acquisition also reinforces Nexans' core energy sector business, particularly in high-voltage and special cables for industry, thanks to Olex's broad product range. Olex, whose brand name and reputation are well-known, has a strong management team and 3 advanced production sites. Finally, this acquisition will offer us synergies, mainly commercial, in particular through the pooling of Nexans sales teams in the world and Olex ones in the Asia-Pacific area", he added.
The investment of approximately 310 million euros (that is to say 7 times expected 2007 EBITDA before synergies) will be entirely financed from Nexans' existing credit lines. It will have an accretive impact as from the first fiscal year. This acquisition will generate balance sheet goodwill of approximately185 million euros and result in the Group's gearing reaching at the end of December 2006 about 47%.
This transaction is subject to the approval of the Australian authorities. The closing is expected by the beginning of December.
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