SOURCE: Munters AB

September 24, 2010 02:15 ET

Statement by the Board of Directors of Munters in relation to the public offer by Alfa Laval

KISTA, SWEDEN--(Marketwire - September 24, 2010) -

The Board of Directors considers the offer by Alfa Laval not to be unfair


This statement is made by the Board of Directors (the "Board") of Munters AB (publ) ("Munters" or the "Company") pursuant to section II.19 of the rules concerning public takeover offers on the stock market adopted by NASDAQ OMX Stockholm (the "Takeover Rules").

On 6 September 2010, Alfa Laval AB (publ) ("Alfa Laval") announced a public offer to the shareholders of Munters to transfer all of their shares in Munters to Alfa Laval (the "Offer"). Alfa Laval offers SEK 68 in cash per share in Munters. The Offer is among other things conditional upon Alfa Laval becoming the owner of more than 90 per cent of the shares in Munters. Alfa Laval has reserved its right to waive this and other completion conditions of the Offer. The Offer is not subject to any financing condition. According to the offer document disclosed by Alfa Laval on 14 September 2010 (the "Offer Document") the acceptance period will expire on 8 October 2010.

The two main shareholders of Munters, Investment AB Latour and AB Industrivärden, who together hold approximately 29.6 per cent of the shares and voting rights of Munters, have on certain conditions undertaken to accept the Offer and transfer their shares to Alfa Laval. The director Jan Svensson has not participated in the Board's handling of or resolutions regarding the Offer, since he cannot be considered independent of Investment AB Latour.

The board of Munters has, on request by Alfa Laval, allowed Alfa Laval to conduct a limited confirmatory so-called due diligence investigation prior to the announcement of the Offer. Alfa Laval has not obtained any non-public price sensitive information within such due diligence investigation. As a part of the Board's evaluation of the Offer, the Board has engaged Lazard as financial advisor and Mannheimer Swartling as legal advisor.

The Board's evaluation

At the beginning of 2010, the Board adopted a strategic decision to investigate the possibilities to divest division MCS in order to focus on the core business of Munters within the product divisions Dehumidification and HumiCool.

On 30 June 2010, the Company announced that an agreement to divest division MCS to Triton had been signed. On 27 August 2010, Munters announced that it had obtained necessary approval from the relevant competition authorities, on terms acceptable for the parties, and that the Company had satisfied its obligation to inform and consult with relevant employee representative bodies in countries where so required. As a result, the divestment of division MCS will be completed in accordance with earlier disclosed conditions. The transaction is estimated to be completed during the third quarter of 2010 and entails that Munters will have a net cash position of approximately SEK 600 million.

Munters' strategy going forward is to focus on the core business and the continued development of the strong market position the Company has within its niches. There is growth potential in several geographies and adjacent product areas, and the divestment of division MCS reinforces Munters' growth capabilities, both organically and through acquisitions. After the strategic decision to divest division MCS, the Company has initiated process for possible acquisitions.

As previously communicated by Munters through the press release on 8 September 2010, the Company has noticed an increased demand for its products during the end of the second quarter and during the third quarter 2010, which has resulted in an increased order intake. Compared to the same month previous year, the order intake increased by 18 per cent in June, 22 per cent in July and 25 per cent in August 2010.[1] The turn is evident in both product divisions. Compared to the same month previous year, HumiCool has shown increased order intake every single month during the past six months up to and including August. Dehumidification has shown increased order intake during the past three months. The board of Munters believes that the order intake will positively affect invoicing and earnings for the current year.

During the last years, Munters has performed a series of actions to make the business more efficient, which makes Munters well positioned when the business situation returns to a normal level. The Board therefore believes that Munters will grow and attain higher earnings when the economic cycle improves, something which is confirmed by the strong order intake described above. In this respect, the Board notes that the sales for the two product divisions prior to the decline in the economic cycle and the financial crisis totaled approximately SEK 4 billion with operating margins above 11 per cent (including head office costs).

On this basis, the Board reached the conclusion that contacting other potential interested parties for Munters would be in the interest of all shareholders. This has also been done through contacts with possible industrial and financial parties. However, the period of time available is short and at this point the Board neither confirm nor deny that any competing offer will materialize.

The board of Munters also believes that there are synergies in a combination of Munters and another industrial company of scale.

Based on the above, it is the Board's view that Munters' commercial base is strong and that in the long term there are additional possibilities for value-creating measures. The Board therefore considers that in the long term, Munters has substantial potential which, for long term shareholders, may justify a higher value of the Company than the Offer implies.

However, in the short term the Offer should be considered in relation to now existing alternatives. The Board concludes in this respect that the price per share offered by Alfa Laval represents a significant premium of approximately 36 per cent (the corresponding premium adjusted for the net cash position in Munters after the divestment of the division MCS is approximately 42 per cent) compared to Munters' volume-weighted average share price on NASDAQ OMX Stockholm during the latest three months up to and including 3 September 2010 of approximately SEK 50. Compared to the last closing price of SEK 52.50 per share on NASDAQ OMX Stockholm on 3 September 2010, being the last trading day prior to the announcement of the Offer, the Offer represents a premium of approximately 30 per cent (the corresponding premium adjusted for Munters' net cash position after the divestment of division MCS is approximately 35 per cent).[2] The price of SEK 68 per share offered by Alfa Laval also represents a premium that is not insignificant compared to the price of the Munters share during a longer period of time than three months prior to the announcement of the Offer. However, the shareholders should note that the price of the Munters share has exceeded the price of SEK 68 offered by Alfa Laval since the announcement of the Offer.

Under the Takeover Rules, the Board should also present its views on the impact the completion of the Offer may have on Munters, especially employment, and its views on Alfa Laval's strategic plans for the Company and the impact these could be expected to have on employment and on Munters' business location. In this respect, the Board notes that Alfa Laval has stated that it appreciates the work that the management and the employees of Munters are performing and also intends to continue to uphold the excellent relation to the employees within Munters. Further, the Board has noted that Alfa Laval believes that, in the short term, the Offer will not result in any substantial change for the management and the employees (including employment terms) or to the employment on the locations where Munters operates. The Board assumes that this statement is correct and has in relevant respects no reason to have a different view.

Based on the above, the Board considers the Offer not to be unfair for the shareholders of Munters.[3]

                               24 September 2010
                                   The Board

For further information, please contact:

Anders Ilstam, Chairman of the Board of Directors
Tel: +46 (0)70 630 76 02

Lars Engström, CEO, Member of the Board of Directors
Tel: +46 (0)8 626 63 03

Munters AB discloses the information provided herein pursuant to the Securities Market Act and the Takeover Rules. The information was submitted for publication on 24 September 2010 at 08.00AM.

[1] Adjusted for currency effects.

[2] According to the Offer Press Release, the premium adjusted for net cash means that Munters' expected net cash position of approximately SEK 566 million (based on the reported net debt as of 30 June 2010 of SEK 734 million and expected net proceeds of SEK 1,300 million from the divestment of division MCS) has been subtracted from the total value of the Offer as well as from the Company's market value, and that the adjusted value of the Offer thereafter has been divided by Munters' adjusted market value.

[3] The director Jan Svensson has not participated in the Board's handling of or resolutions regarding the Offer, since he cannot be considered independent of Investment AB Latour.

This press release is also available on

Munters is a global leader in energy efficient air treatment solutions and restoration services based on expertise in humidity and climate control technologies. Customers are served in a wide range of segments, the most important being insurance-, utilities-, food-, pharma- and electronics- industries. Manufacturing and sales are carried out via the Group's own companies in more than 30 countries. The Group has close to 4,000 employees and net sales of about SEK 6.5 billion. The Munters share is listed on OMX Nordic Exchange Stockholm, Mid Cap. For more information see


Press release PDF:

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Source: Munters AB via Thomson Reuters ONE

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