May 17 2008
BE Group is acquiring Ferram Steel a.s. to continue the strategy of growth in Central and Eastern Europe. Ferram Steel a.s. will make a positive contribution to growth and profit and generate cost and capital synergies combined with BE Group’s current Czech operations.
Ferram Steel a.s. reported sales of SEK 343M and operating profit of SEK 15M in 2007. The company is also showing a very strong first quarter in 2008. BE Group had sales of SEK 80M in the Czech Republic in 2007. With the acquisitions of Ferram Steel a.s. and Czechprofil, finalized earlier this year, BE Group has multiplied turnover in the Czech Republic tenfold to become one of the five largest distributors in the country, with sales of almost SEK 750M.
“BE Group is taking a significant step in the Czech Republic with the acquisition of Ferram Steel a.s. to achieve the critical mass needed for profitable operations in the long term,” says Håkan Jeppsson, president and CEO of BE Group.
Ferram Steel a.s. is a subsidiary of Ferram a.s. and concentrates on flat products. The company has sites in the eastern Czech Republic cities of Opava and Ostrava, where the head office is also located. Ferram Steel a.s. recently invested in a sophisticated logistics facility in Ostrava, which is creating substantial opportunities for further business growth in the Czech Republic, Slovakia and southern Poland. The proximity to nearby steel producers will reduce both costs and the environmental impact of shipments.
“Ferram Steel a.s. is a strategic acquisition that strengthens our position not only in the Czech Republic but throughout Central Europe. The company enjoys a favourable geographical location, expansive logistics, and a strong supplier network in Ukraine, all of which enhance the value proposition for BE Group as a whole,” says Håkan Jeppsson.
The acquisition is expected to make an immediate positive contribution to growth and profit and yield synergies including lower costs, improved inventory turnover and higher sales. Subject to approval by the Czech competition authorities, the transaction is expected to be finalized during the summer.
Posted May 14th,2008