Exel Sells its Outdoor Business to Karhu Sports
THURSDAY, 8 MAY 2008
As Exel has previously disclosed, Exel Sports Brands is no longer a core activity within Exel Group. The Exel Board of Directors has been reviewing structural alternatives for Exel Sports Brands and seeking a strategic partner with an interest in developing the sports equipment business.
On 2 May 2008, the Exel Board passed the following resolutions regarding the restructuring of Exel Sports Brands:
- Exel Sports Brands will be divided into two businesses: floorball and outdoor. The outdoor business consists of cross-country, alpine, Nordic Walking, trekking, and blading poles as well related traded items.
- Exel will transfer the outdoor business of Exel Sports Brands to Karhu Sports.
- The remaining floorball business will be organized as a separate operation within Exel Group.
- Provisions related to restructuring of Exel Sports Brands will be included in the second quarter results for 2008.
Karhu Sports, one of the leading Finnish sports equipment manufacturers, will take over the outdoor business, acquire the inventory and order backlog related to the outdoor business through an asset deal. Karhu Sports has a strategic interest in developing the business. The transaction also includes a long-term licensing agreement related to the use of the Exel brand together with other brands such as Nordic Walker and Nordic Blader for selected product groups. The employees of the outdoor business in Finland and Germany will be transferred to Karhu Sports as existing employees. At present, there are nine employees in Finland and 18 in Germany.
The business transfer will streamline the business structure of Exel Group and increase the focus on the core industrial activities. The transaction with Karhu Sports secures the continued presence and distribution of Exel branded poles in the sports equipment market in a model that strengthens Exel's profitability. A condition precedent for the business transfer to Karhu Sports is that the consultations related to personnel in Germany are concluded according to German law. The consultations are expected to be concluded during June 2008.
The remaining floorball business of Exel Sports Brands will be operated as a separate unit and its operations streamlined. In 2007, the business had a turnover of some EUR 5 million and it has a leading market position in the Nordic floorball market. Exel will conduct a strategic review and evaluate different structural alternatives for the business.
Provisions for restructuring costs will be made in the second quarter of 2008, and are estimated to be maximum at the level of EUR 7 million. Due to these provisions, the profit before taxes for the second quarter is expected to be negative.
For the full year 2008, the profit before taxes is expected to be negative for the Group.
"I am satisfied with the solution we found for the outdoor-business. This arrangement is positive for both parties. Karhu Sports has a long-term interest in developing the business. The Outdoor business transfer secures the continued presence and distribution of Exel branded poles in the sports equipment market in a model that strengthens Exel's profitability. Exel can now sharpen the focus on its core business, namely Exel Composites," says the President and CEO of Exel Oyj, Vesa Korpimies.
"The combination of Karhu and Exel broadens our product range and international presence. We can utilize Exel's distribution channels in Europe and offer strong brands and performance-oriented products within cross-country skiing, Nordic Walking, and other outdoor sports. The deal allows us to realize scale economies and provide a better value proposition to our customers," says the President and CEO of Karhu Sporting Goods Oy, Pertti Keskitalo.
The parties have agreed not to disclose the transaction value of the business transfer.
Source:
www.bolagsfakta.se
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