P L A N N E D A C Q U I S I T I O N O F H E X A G O N R A G A S C O A N D
F O R M A T I O N O F S U S T A I N A B L E E N E R G Y S O L U T I O N S J V
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On May 29, 2024, Worthington Enterprises announced the planned acquisition of Hexagon Ragasco and the formation of a Sustainable Energy Solutions Joint Venture with Hexagon Composites
Sustainable Energy Solutions (SES) Joint Venture (JV)
- Sold 49% interest in SES segment to Hexagon Composites for approximately $10M, effective 05/29/24
- Worthington will maintain 49% ownership of the unconsolidated JV; remaining 2% will be held by SES management
- Hexagon Composites is a global leader in clean energy solutions and the new ownership structure is expected to better position the business for future success
Hexagon Ragasco acquisition
- Plan to purchase 100% of Hexagon Ragasco for approximately $98M, subject to closing adjustments and a potential earnout out based on the business financial performance through the remainder of calendar year 2024
- A global market leader in lightweight, customizable propane (LPG) composite cylinders
- Calendar year 2023 net sales of approximately $64M and adjusted EBITDA of $13M
- Expected to close on or around 06/03/23
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Hexagon Ragasco Acquisition
Hexagon Ragasco will become part of the Building Products segment
- Manufacturing facility in Raufoss, Norway with approximately 130 employees
- Calendar year 2023 Net sales of approximately $64M and adjusted EBITDA of $13M
- A global market leader in lightweight, customizable LPG composite cylinders used for leisure, household (cooking) and industrial applications
- Complementary to our Amtrol-Alfa facility in Portugal
- Furthers Worthington's interests in advancing the use of clean fuels as part of the global energy transition
HISTORICAL
FINANCIAL METRICS
( $ MILLIONS)
NET SALES 1
$66$64
$54
CY21 | CY22 | CY23 |
ADJ. EBITDA1
$12$13
$9
CY21CY22CY23
1 Financials adjusted to reflect carve out from Hexagon Composites and | |
converted from NOK to USD assuming exchange rate of 10.97 NOK/USD | |
Broad array customized composite LPG cylinders used for leisure, household and industrial applications | 3 |
Hexagon Ragasco operates a high volume, highly automated manufacturing facility in Raufoss, Norway
Location + Capacity | Key Highlights | ||
• High overall equipment effectiveness and mature | |||
world class manufacturing developed over the years | |||
• Full traceability and advanced data collection | |||
throughout the production process | |||
• Well-developed business support infrastructure and | |||
13,400m2 Facility | processes | ||
• Highly competent workforce, attractive to technical | |||
and commercial talents, and low employee turnover |
Production Capacity
~ 2m units/year
- Unique continuous improvement culture demonstrated by substantial productivity gains over the years
Avg. cylinder production time, seconds
- 84%
74 sec
1
12 sec | |
2000 | 2022 |
1 Awarded by Smart Industry in 2015
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Hexagon Ragasco fits well within the Building Products Segment and aligns with our acquisition strategy to drive profitable growth
Strategic rationale
- Expands LPG platform in Building Products segment
- Adds a global market leader in lightweight LPG composite cylinders
- Enhances manufacturing expertise through a highly automated production facility and technical workforce with global sales reach
- Broadens customer base into new regions and use cases
- Complements our existing Amtrol-Alfa facility in Portugal
- Attractive financial profile with high teens EBITDA margins and solid cash flow
- Expected to be accretive to earnings with the potential for future synergies related to best practice sharing along with future commercial and purchasing opportunities
Aligns well our with | ✓ Strong brand and market position |
acquisition criteria | ✓ Higher margin, higher growth brands or products |
✓ Asset-light or low capital intensity business model | |
✓ Exposure to the channels where we have leadership positions | |
✓ Additive capabilities - must make us better | |
✓ Demonstrated sustainable competitive advantage |
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Building Products Segment At-a-Glance
KEY FIGURES
(TTM AS OF Q3 FY24 1 )
Heating & Cooking
Facilitating the transition away from fuel oil & biomass, as well as providing back-up power solutions.
Water
Key component in providing safe and clean drinking water in homes and buildings.
Cooling
Integral in storing and transporting refrigerants while facilitating the transition to lower global-warming potential and ozone-depleting gases.
Construction
Provides safe storage and transport of spray polyurethane foam insulation and roofing adhesive.
Ceiling Solutions
Solutions for ceilings, walls and partitions, suspended systems, and trim and transitions in numerous commercial, education, healthcare, retail and specialty environments, among others.
Metal Framing
Cold-formed steel framing and drywall/plastering finishing systems for interior and exterior applications, as well as clips, connectors, metal lath, welded wire, barrier mesh and accessories.
Adds to our heating & cooking offerings in Building Products segment and expands overall capabilities
$640M 35% $222M
NET SALES | AD J . EBI TD A MAR GI N | AD J . EBI TD A |
FINANCIAL METRICS
( $ MILLIONS 1 )
NET SALES
$673 | $717 | $640 |
FY22FY23TTM
ADJ. EBITDA | ||
$237 | $220 | $222 |
FY22 | FY23 | TTM |
1 TTM figures as of Q3 FY2024 and does not include impact of Hexagon Ragasco acquisition. Net Sales reflects wholly-owned businesses only, exclude JVs.
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Worthington Enterprises
KEY INVESTMENT HIGHLIGHTS
- Established Portfolio of Market-Leading Brands
- Strong Underlying Secular Trends Enabling Steady Long-Term Growth
- Business Model Drives High Free Cash Flow and Returns
- Worthington Business System Accelerates Growth and Profitability
- Innovation For Highly Engineered Products Drives Incremental Sales and Margin
- Guided by Our Philosophy - a People-First,Performance-Based Culture
- Low Leverage and Ample Liquidity Provides Financial Flexibility
1 TTM figures as of Q3 FY2024. Sales exclude pro-rata share of unconsolidated JV sales. Percentages may not add up to 100% due to rounding.
FOUNDED IN
1955
NET SALES OF
$1.3 BILLION1
Adj. EBITDA of $279 million
Net Sales by End-Market1
40%49%
11%
Building Products Consumer Products
Sustainable Energy Solutions | 7 |
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Worthington Enterprises Inc. published this content on 29 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 May 2024 15:23:03 UTC.