Uponor (Deutschland) GmbH, member of the Uponor Group has today signed a contract to divest the entire share capital of Hewing GmbH, Uponor’s non-core OEM unit based in Ochtrup, Germany. The buyer is Rettig Germany GmbH, a member of the Finnish heating technology manufacturer Rettig Group.
The deal, at a value of €11.9 million, leads to an impairment write-down of €10.5 million for the financial year 2011, impacting the operating profit of continuing operations. For this reason, Uponor’s full-year operating profit for 2011 will remain clearly below the previous year’s level.
In 2011, Hewing GmbH generated net sales of nearly €50 million, and employed a staff of 230 persons. Operating under its own brand name, Hewing has served as an OEM pipe manufacturer to various central European underfloor heating and plumbing system brands. Hewing’s PEXc pipe technology has been non-core for Uponor after the global brand realignment in 2006, resulting in a stronger focus on the Uponor multi-layer composite and PEXa pipe technologies in building solutions.
Uponor’s CEO Jyri Luomakoski comments on the deal:
- The business environment for OEM manufacturing has weakened in Europe in recent years, and the evolution was speeded up by the difficult market conditions in the past few years. This has severely impacted performance, with little room for improvement in the current setup.
- We are happy to have found a buyer who can bring a considerable own volume to Hewing. I believe this is a favourable move for the entire industry that is faced with idle capacity especially in central Europe. I trust the deal will bring optimism about the future amongst the personnel of Hewing.
- The deteriorating performance of Hewing in the recent years has had a notable impact on Uponor’s consolidated results. In addition to operating profit, the divestment will have a positive impact on our future cash flow from operations and gearing.
The deal is effective 1 January 2012, pending on certain factors, such as an approval from competition authorities. The closing of the deal is expected to take place in March-April 2012.
Uponor will continue to have a presence in the Ochtrup region where it has some warehousing, administration and marketing services related to the PEXa technology-based business under the Uponor brand.
Uponor acquired Hewing GmbH in early 1988 as its first step in the strategy to enter the growing market of hot water pipe systems for buildings. Hewing’s advanced know-how of cross-linked polyethylene pipe (PEXc) technology and its access to new customer segments in Germany have played a key role in Uponor’s journey towards its leading international position as a supplier of building solutions in Europe and North America.