Powerflute : Acquisition Of Corenso



1 December 2014

POWERFLUTE

ACQUISITION OF CORENSO

Powerflute Oyj ("Powerflute" or the "Company") announces the completion of its acquisition of Corenso, an international producer of cores and coreboard (the "Acquisition"). The Acquisition constitutes a reverse takeover under the AIM Rules for Companies and following completion of the necessary formalities, the readmission of the shares of the enlarged Powerflute group to trading on the AIM market of the London Stock Exchange took place at 08.00 a.m. today.

The price agreed for the purchase of Corenso, on a cash free and debt free basis, with normalised working capital and before taking account of the presence of minority interests, was €90.0 million. In its unaudited interim financial information for the six months ended 30 June 2014, Corenso reported EBITDA of €10.6 million on revenues of €97.5 million. Powerflute considers that during the second half of the year Corenso has continued to trade in line with the trends outlined in the Admission Document published on 30 September 2014.

After taking into account the preliminary valuation attributed to minorities of €8.1 million and the initial estimate of net cash acquired and adjustments required to net working capital of €20.4 million, the price paid for Corenso at closing was €102.3 million. The final purchase price is subject to possible further adjustment as described in the Admission Document published on 30 September 2014.

The Company elected not to proceed with the proposed issuance of notes to finance the Acquisition. The Company will instead utilise the three year senior bridge facility to finance purchase price in accordance with the terms described in the Admission Document.

Commenting on the Acquisition, Dermot Smurfit, Chairman of Powerflute said:

"We are delighted to complete the acquisition of Corenso and look forward to working closely with the management, customers and suppliers to further strengthen its position as a leading international supplier of high performance cores and coreboard. The acquisition of Corenso is a major step for Powerflute and is consistent with our strategy of pursuing opportunities for growth and development in attractive, specialty paper and packaging markets. Following completion of the integration of Corenso, Powerflute will be a significantly larger group which we believe will provide us with a strong foundation from which to pursue further acquisition opportunities in due course."

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For further information, please contact:

Powerflute Dermot Smurfit (Chairman) Marco Casiraghi (CEO) David Walton (CFO)	c/o Oliver Winters, FTI Consulting [phone]
Numis Securities Mark Lander (Corporate Broking) Andrew Holloway / Jamie Lillywhite (Nominated Advisor)	[phone]
FTI Consulting Oliver Winters Georgina Goodhew	[phone]

About Powerflute

Powerflute is a paper and packaging group quoted on the AIM market of the London Stock Exchange (Ticker: POWR) which seeks to acquire businesses with strong fundamentals whose performance can be improved through a combination of management focus and targeted investment. The Group operates a paper mill in Kuopio, Finland which produces a specialised form of semi-chemical fluting made from locally sourced birch. Corrugated boxes manufactured using Nordic semi-chemical fluting demonstrate superior strength and moisture resistance and are used for transportation of fruit and vegetables, high-value industrial goods such as electrical appliances and automotive components. The Kuopio mill is one of only three suppliers of Nordic semi-chemical fluting in Europe. For further information, please visit www.powerflute.com.

About Corenso

Corenso is a leading international manufacturer of high performance cores and coreboard operating with coreboard mills in the United States and Europe and a network of core producing facilities in Europe, North America and China. Cores and coreboard are manufactured from recycled paper and are usedfor applications in paper, packaging, textiles, steel, aluminium and many other industries. Cores and coreboard produced by Corenso demonstrate superior strength and rigidity and are suitable for use in the most demanding applications. For further information, please visit www.corenso.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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