Zurich, Switzerland, November 23-- The international private equity company CVC Capital Partners is planning to acquire Swiss Forbo Group for a price of SFR 330 per share ($2.85) for a total transaction value of ca SFR 450 M ($215.6M).
The administrative board initially refused the offer for the time being but is in negotiations.
In October 2004 Forbo decided against a spin-off of the flooring business and decided to increase capital by SFR 200 M ($172.4M). The capital increase is necessary to reduce net indebtedness.
The company is restructuring the flooring, adhesives and adhesive tapes activities. Restructuring costs are estimated at around SFR 200 M. Forbo will reduce overcapacities and streamline production, distribution and administration.
Forbo targets a turnover increase of 1%/y and an operating profit margin of between 6-7% by 2007 (5% in 2004). In the plastic tapes segment Forbo will complete the turnaround and improve profitability through cost reduction on all levels as well as focus on high-grade product segments. Turnover by the adhesives tapes division is expected to rise by 2-3%/y. The plastic products division will focus on growth and high margin products. Turnover of this division is predicted to rise by 3-4%/y.
