Oerlikon CEO Could Raise 1.2 Billion Francs for Acquisitions
OC Oerlikon Corp. (OERL) could raise 1.2 billion Swiss francs ($1.27 billion) for takeovers if needed as the world’s largest maker of textile machinery reported full year earnings that beat analysts’ estimates.
Earnings before interest, taxes, depreciation and amortization rose 22 percent to 547 million francs, beating the 524 million-franc estimate of analysts in data compiled by Bloomberg. Sales rose 6.4 percent to 2.9 billion francs, also beating estimates.
“We are much more flexible for acquisitions this year,” Chief Executive Officer Michael Buscher said in a telephone interview, adding that Oerlikon has 1.2 billion francs of available debt. Buscher will focus on adding to existing units making vacuum pumps and coatings for cars, he said.
Buscher is moving Oerlikon away from its traditional textile machinery base to focus on more profitable areas. He agreed to sell the natural-fibers and textile-components units, with an enterprise value of 650 million francs, to Chinese investor Pan Xueping’s Jinsheng Group in December. Oerlikon predicted its order intake, sales and underlying profitability will hold steady in 2013.
Shares of the engineering firm, whose largest shareholder is Russian billionaire Viktor Vekselberg, the world’s 45th- richest man, more than doubled last year. The stock traded 3.3 percent higher at 12.5 francs at 9:34 a.m. in Zurich.
“Oerlikon delivered a good set of full year earnings, outperforming market expectations,” Patrick Laager, an analyst at Credit Suisse AG in Zurich said in a note to clients. Earnings momentum as well as an increasingly robust balance sheet for acquisitions make Oerlikon “one of the most attractive stocks in the Swiss industrial space,” he said.
The natural fibers sale, announced in December, will bring proceeds of as much as 500 million francs to Pfaeffikon, Switzerland-based Oerlikon. Buscher said he expects the deal to close in the second quarter, one quarter ahead of prior expectations.
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