Oerlikon Surges as Vacuum Unit Sale to Atlas Beats Expectations

  • Oerlikon sale based on enterprise value of 525 million francs
  • Deal will expand Atlas Copco's vacuum offering, CFO says

OC Oerlikon Corp AG shares gained the most in more than 2 1/2 years after the Swiss industrial equipment maker agreed to sell its vacuum business to Sweden’s Atlas Copco AB for more than some analysts had expected.

The stock gained as much as 7.5 percent, the most since March 2013, and traded 6.5 percent higher at 10.70 Swiss francs by 11:48 a.m. in Zurich, their highest level since Aug. 21. Atlas Copco shares rose by as much as 1.4 percent.

Oerlikon, which is pruning its portfolio to focus on high-growth businesses serving the energy and transportation markets, plans to sell the Leybold Vacuum unit based on an enterprise value of 525 million Swiss francs ($517 million), the Pfaeffikon, Switzerland-based company said in a statement on Friday. It also confirmed the full-year outlook.

“While the selling price is in line with the valuation we carried for the vacuum business a year ago, we would have expected a lower price based on recent revenue and profitability developments,” analysts at Vontobel wrote in a note to clients. “The price tag comes as a positive surprise.”

The acquisition would diversify Atlas Copco’s vacuum offering, expanding a business that currently relies to a large extent on sales to the semiconductor industry, the Swedish company’s Chief Financial Officer Hans Ola Meyer said in a phone interview. The Oerlikon unit’s vacuum equipment is used to create clean, particle-free work spaces for manufacturing of car parts and laboratory equipment.

“This makes our vacuum business broader and gives it a more even exposure to all kinds of vacuum applications,” Meyer said. “In terms of geographies, they have more than 40 percent of sales to Europe, while we’ve had between 15 and 20 percent of sales” to the continent, he said.

Atlas Copco, which is the world’s largest maker of compressors, added vacuum to its offering by acquiring the U.K.-based Edwards Group for $1.5 billion in 2014. Vacuum pumps are used in in a wide range of facilities making products such as circuit boards and canned goods and during surgery to drain wounds. 

Oerlikon Leybold has been burdened by reorganization and corporate costs that won’t be transferred to Atlas Copco, which aims to increase the company’s operating-profit margin to 15 percent, Meyer said.

The transaction is expected to close by middle of 2016, Oerlikon said.

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