Oerlikon Buys Coatings Unit From Sulzer for $1.1 Billion
OC Oerlikon AG (OERL) agreed to buy a unit making coatings for machinery and airplane engines from Sulzer AG (SUN) in a deal valued at 1 billion francs ($1.1 billion) to broaden the Swiss company’s customer base.
Metco will be absorbed by Oerlikon’s Balzers division, creating a spray coatings supplier with 1.2 billion francs ($1.3 billion) in sales, Oerlikon said in a statement today. Viktor Vekselberg is the largest shareholder in both Sulzer and Oerlikon through his Renova Group.
The deal ends a six-month sale process, with the job of integrating Metco falling to Chief Executive Officer Brice Koch, who joined from ABB Ltd. (ABBN) on Jan. 16. Oerlikon has been seeking to deploy a 470-million franc cash winfall from the sale of its natural-fibers business to China’s Jinsheng group in July.
“We are pleased that we have found a new owner for the Sulzer Metco division that will leverage the strengths of the business in the best possible way,” Sulzer CEO Klaus Stahlmann said in a statement.
Credit Suisse advised Sulzer on the sale. The value of the deal given is based on enterprise value.
Pumpmaker Sulzer expects cash pretax proceeds of about 850 million francs from the deal, with management focused on units serving the oil and gas, power and water markets. Closure of the transaction is expected in the third quarter. Metco, with sales of 690 million francs, accounted for 17.2 percent of Sulzer’s sales in 2012.
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