Outotec to acquire Larox

Outotec has announced that it is to acquire control in Larox Corp, the leading manufacturer of filtration solutions for mining industry applications and to make a mandatory public tender offer for all the remaining Larox shares. The transaction currently values Larox as a whole at approximately €93 million.

Outotec states that it aims to grow its business by acquiring complementary technologies, increasing significantly the proportion of services in its sales and applying existing technologies in new industries.

Tapani Järvinen, CEO of Outotec commented: "Our aim to supplement the technology portfolio became achievable through this share exchange arrangement. Larox's products and services fit seamlessly into Outotec's technology portfolio. The transaction also supports our objective of profitable growth. By combining our respective sales and service networks and product portfolios we can provide even more comprehensive solutions and services for minerals concentrators and metallurgical plants and generate more added value to our joint customer base."

"I believe that this arrangement will provide Larox's employees with more diverse opportunities to develop their careers and all shareholders will be offered an opportunity to continue to invest in a strong company within the same industry. Also the customers will benefit from the increased resources, which will allow Larox to persistently develop and increase the filtration business", says Timo Vartiainen, chairman of the board of directors of Larox.

Outotec believes that the combination will provide substantial benefits to the shareholders and other stakeholders of both companies. The transaction is expected to increase Outotec's service business by over €70 million and will allow the company to increase its sales of services to an annual level of €250-300 million by the end of 2010. Combining the global sales, service networks and administration of both companies as well as economies of scale achieved by the larger size are estimated to create synergy benefits of at least €7 million annually.

In connection with the share transactions, Capillary Oy has informed Outotec that it will make an offer to increase its holding in Larox Flowsys to 49%. Larox Flowsys Oy will be entitled to continue using the Larox name for an agreed period. Based on a statement given by an external independent expert, the value of the Larox Flowsys Oy shares to be sold is currently approximately €3.5 million.