Powerflute is a paper and packaging group which seeks to acquire businesses with strong fundamentals whose performance can be improved through a combination of management focus and targeted investment


Buy
Specialty paper and packaging businesses
Established position in attractive markets
Well invested with no major short-term capital needs
Reasons for any underperformance are clear

Improve
Management discipline
Effective leadership
Production expertise
Entrepreneurial culture

Develop
Establish strategy for sustainable growth and margin improvement
Invest in product development and production capabilities
Focus on operational cash generation
Develop long-term strategy to realise return on investment


businesses.

http://www.powerflute.fi/

Nice recovery

Recommended Cash Offer

RNS


RNS Number : 9119J

Powerflute Oyj

15 September 2016






NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.



FOR IMMEDIATE RELEASE

15 September 2016



RECOMMENDED CASH OFFER

for

POWERFLUTE OYJ

by

NORDIC PACKAGING AND CONTAINER (FINLAND) HOLDINGS OY

an affiliate of

MADISON DEARBORN PARTNERS, LLC



The boards of directors of Nordic Packaging and Container (Finland) Holdings Oy ("Bidco") and Powerflute Oyj ("Powerflute" or the "Company") are pleased to announce the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Powerflute (including all outstanding Powerflute Options) not already owned, or agreed to be acquired, by Bidco. Bidco is a company recently incorporated in Finland by investment funds advised by Madison Dearborn Partners, LLC ("MDP") for the purpose of making and implementing the Offer. Further details in relation to MDP and Bidco are set out in paragraph 9 of this Announcement.

Summary

· Under the terms of the Offer, Powerflute Shareholders and Powerflute Optionholders (other than the Smurfit Parties) will be entitled to receive:


For each Powerflute Share:

90 pence in cash; and


For each Powerflute Option:

90 pence in cash less the applicable subscription price for such Powerflute Option.


· The Offer values the entire issued and to be issued share capital of Powerflute (including all outstanding Powerflute Options) at approximately £268 million and represents:

· a premium of approximately 22.0 per cent. to the Closing Price per Powerflute Share of 73.75 pence on 14 September 2016, being the last Business Day prior to the date of this Announcement; and

· a premium of approximately 23.6 per cent. to the average Closing Price of 72.82 pence per Powerflute Share for the 90 day period up to and including 14 September 2016, being the last Business Day prior to the date of this Announcement.

· Bidco has either agreed to acquire pursuant to the Smurfit Undertakings or received irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of, in aggregate, 152,034,507 Powerflute Shares (inclusive of Powerflute Shares underlying Powerflute Options), representing approximately 51.0 per cent. of the entire issued share capital of Powerflute (assuming exercise of all outstanding Powerflute Options and excluding treasury shares).

· Bidco has already agreed, in private transactions pursuant to the Smurfit Undertakings, to acquire the Smurfit Parties' entire beneficial holdings in Powerflute amounting to, in aggregate, 81,973,221 Powerflute Shares (inclusive of Powerflute Shares underlying Powerflute Options), representing approximately 27.5 per cent. of the entire issued share capital of Powerflute (assuming exercise of all outstanding Powerflute Options and excluding treasury shares), for 80 pence in cash for each Powerflute Share and 80 pence in cash less the applicable subscription price for each Powerflute Option and otherwise on the terms and conditions set out in the Smurfit Undertakings. The Smurfit Parties will have no continuing equity interest in Powerflute following the completion of the Offer.

· Bidco has obtained an irrevocable undertaking from Henderson Global Investors Limited and Alphagen Capital Limited (in their capacities as discretionary investment managers) to accept, or direct acceptances of, the Offer in respect of a total of 49,634,357 Powerflute Shares, representing, in the aggregate, approximately 16.7 per cent. of the entire issued share capital of Powerflute (assuming exercise of all outstanding Powerflute Options and excluding treasury shares). Further details of these irrevocable undertakings are set out in Appendix 3 to this Announcement.

· The Independent Directors, who have been so advised by Rothschild as to the financial terms of the Offer, considers the terms of the Offer to be fair and reasonable. In providing advice to the Independent Directors, Rothschild has taken into account the commercial assessments of the Independent Directors. Rothschild is providing independent financial advice to the Independent Directors. In view of their ongoing involvement, neither Marco Casiraghi nor David Walton has participated in the preparations and deliberations regarding the Independent Directors' recommendation.

· The Independent Directors have consulted with the Company's Nominated Adviser, Numis Securities Limited, regarding the matters described in this Announcement where required by and in accordance with the AIM Rules.

· The Independent Directors intend to recommend unanimously that Powerflute Shareholders and Powerflute Optionholders accept the Offer, as the Powerflute Directors (other than Dr. Dermot F. Smurfit) who hold Powerflute Shares and Powerflute Options have irrevocably undertaken to do in respect of their entire beneficial holdings in Powerflute amounting to, in aggregate, 20,426,929 Powerflute Shares (inclusive of Powerflute Shares underlying Powerflute Options), representing approximately 6.9 per cent. of the entire issued share capital of Powerflute (assuming exercise of all outstanding Powerflute Options and excluding treasury shares). Shareholders should refer to paragraph 6 of this Announcement for further detail on the background to and reasons for the Independent Directors' recommendation.

· The Offer is conditional upon, amongst other things, Bidco receiving valid acceptances (which have not been withdrawn) in respect of Powerflute Shares and Powerflute Options which, when taken together with the Powerflute Shares and Powerflute Options that Bidco has actually acquired (or has an unconditional right to acquire) pursuant to the Smurfit Undertakings and any other Powerflute Shares or Powerflute Options acquired by Bidco before or during the Disclosure Period (whether pursuant to the Offer or otherwise), will result in Bidco holding more than 90 per cent. of the Powerflute Shares and voting rights then normally exercisable at a general meeting of Powerflute (assuming exercise of all outstanding Powerflute Options and excluding treasury shares).

· If the Offer becomes, or is declared, unconditional in all respects and sufficient acceptances of the Offer are received, Bidco intends to procure that Powerflute will make an application to the London Stock Exchange for the cancellation of the admission to trading on AIM of all the Powerflute Shares. Cancellation of admission to trading is likely to reduce significantly the liquidity and marketability of any Powerflute Shares in respect of which the Offer has not been accepted at such time. It is also intended that, following implementation of the Offer, Bidco will seek to re-register Powerflute as a private limited company.

· If the Offer becomes, or is declared, unconditional in all respects and sufficient acceptances of the Offer are received, Bidco also intends to initiate compulsory redemption proceedings pursuant to Chapter 18 Section 1 of the Finnish Companies Act to acquire compulsorily, on the same terms as the Offer, the remaining Powerflute Shares in respect of which the Offer has not at such time been accepted, whether or not the Offer remains open.

· Powerflute has its registered office in Finland and is not subject to the UK City Code on Takeovers and Mergers (the "Code"). Accordingly the Code does not apply to the Offer by Bidco for Powerflute and this transaction is not subject to the jurisdiction of, or being regulated by, the UK Panel on Takeovers and Mergers (the "Takeover Panel"). However, Powerflute and Bidco have agreed, to the extent set out in the Implementation Agreement, that they will conduct themselves and the Offer as if the Offer were subject to the Code.

The offer price for each outstanding Powerflute Share validly tendered (and not validly withdrawn) in accordance with the terms and conditions of the Offer will be payable in Sterling. However, beneficial owners of Powerflute Shares that are registered directly in their own name in the Finnish book-entry system will have the option to receive (in full satisfaction of Bidco's obligations in respect of the offer price) payment in respect of their Powerflute Shares that are validly tendered (and not validly withdrawn) in accordance with the terms and conditions of the Offer in the equivalent amount of Euros determined as near to the payment date as reasonably practicable based on the Euro spot rate against the Sterling exchange rate on the nearest practicable day to such payment date (as determined and implemented by the receiving agent for the Offer).

This summary should be read in conjunction with the following full announcement and the Appendices. The Offer will be subject to the Conditions and principal further terms set out in this Announcement and to the full terms and conditions that will be set out in the Offer Document and, in respect of Powerflute Shares held in certificated form and Powerflute Options, the applicable Form of Acceptance.

It is intended that the Offer Document and the Forms of Acceptance containing further details of the Offer will be despatched to Powerflute Shareholders and Powerflute Optionholders (other than to persons in a Restricted Jurisdiction) as soon as practicable and, in any event, not later than 28 days after the date of this Announcement (unless agreed otherwise with the Independent Directors).

Appendix 1 contains the conditions and certain further terms of the Offer. Appendix 2 contains bases and sources of certain information contained in this summary and the following announcement. Appendix 3 contains details of irrevocable undertakings received by Bidco. Appendix 4 contains the definitions of certain terms used in this summary and this Announcement.

Powerflute confirms that, as of close of business on 14 September 2016, it had in issue 290,650,374 ordinary shares of no nominal value (excluding shares held in treasury). The International Securities Identification Number for Powerflute Shares is FI0009015291.

The above figure may be used by shareholders to determine the percentage of issued share capital they hold in Powerflute for the purposes of making Disclosure as described in the Announcement.

Powerflute (LON:POWR), up 20% to 88.5p. Bidco has made an offer of £268mln for the company, which will see shareholders receive 90p per share in cash.

Increase of shareholding in Harvestia Oy
RNS
RNS Number : 8568N
Powerflute Oyj
31 October 2016
 
31 October 2016
 
POWERFLUTE OYJ
 
Increase of shareholding in Harvestia Oy
 
Powerflute Oyj ("Powerflute" or the "Company") today announces that it has entered into a conditional agreement to purchase 47.4% of the shares of Harvestia Oy ("Harvestia"), the wood supply company in which it already has an interest of 47.4%, from Vapo Oy ("Vapo") for cash consideration of €1.1 million. The transaction remains conditional upon amongst other things receipt of clearances from relevant competition authorities and is currently expected to complete on 2 January 2017. Following completion of the transaction, Powerflute's interest in the issued share capital of Harvestia would increase from 47.4% to 94.7%, with the remaining shares held by Harvestia's senior management.
 
Harvestia is a wood supply company based in Finland, organising the procurement, harvesting and delivery of wood and other forest products to users in the paper, sawmill, energy and biofuel sectors. The company was established by Powerflute and Myllykoski Corporation in 2008 and has been under the joint control of Powerflute and Vapo since 2012. Harvestia takes full responsibility for all aspects of the wood supply chain, including negotiating procurement of wood from forest owners, harvesting operations, storing and management of wood inventories and delivery logistics. Harvestia is currently the sole supplier of wood to Powerflute's semi-chemical fluting mill in Kuopio, Finland.
 
For the year ended 31 December 2015, Harvestia generated revenues of €165.5 million, including sales of €33.4 million to Powerflute and sales of €63.0 million to Vapo. Its profit before taxation for the year was €0.4 million and at 31 December 2015 it had total net assets of €6.4 million. The contemplated transaction will have no impact on the financial results or financial position of Powerflute for the year ending 31 December 2016, but the results of Harvestia will be consolidated into those of Powerflute for the year ending 31 December 2017.