FLSmidth has agreed to sell its Cement business to an affiliate of Pacific Avenue Capital Partners, a global private equity firm specialising in carve-outs and other complex transactions, for an initial total sum of €75 million (DKK 550 million).
In early 2023, Copenhagen, Denmark-headquartered FLSmidth embarked on a strategic journey with the announcement of new pure-play strategies for its Mining and Cement businesses (ref. Company Announcement no. 2-2023). Since then, FLSmidth has simplified and rightsized both businesses to further strengthen their respective market positions, with a strategic focus on the core technologies and services required in the mining and cement industries. This has resulted in a significantly improved and more stable commercial and financial performance for both businesses.
On 29 January 2024 (ref. Company Announcement no. 1-2024), FLSmidth announced its intention to explore the available divestment options for its Cement business, with the objectives of enabling the Cement business to maximise its full potential as well as to further strengthen our Mining business’ market-leading position as a full flowsheet technology and service provider to the global mining industry.
Chair of the Board of Directors of FLSmidth, Mads Nipper, said: “I am incredibly proud of what our Cement business has achieved in its more than 140-year-long history with FLSmidth. We firmly believe that
this divestment represents a pivotal step in unlocking the full potential for both our Mining and Cement businesses. Our Cement business is now well-positioned for future success, with the flexibility to pursue its
strategic ambitions and create exciting new opportunities for its employees to innovate and grow.”
CEO of FLSmidth, Mikko Keto, comments: “The divestment allows us to sharpen our focus on our core Mining business, positioning FLSmidth as a pure-play leader in the mining industry. With a clear and focused Mining strategy, we are confident that we are well-positioned to drive long-term value for our customers, shareholders and other stakeholders and enhance our competitive position.”
Jason Leach, Partner and Investment Committee Member at Pacific Avenue Capital Partners, said: “We are excited to acquire FLSmidth Cement, a global leader providing mission-critical equipment and
aftermarket solutions in the cement sector. The business has a rich history and strong brands, including Fuller, Pfister, and Ventomatic. We believe that cement will continue to play a crucial role in global economic development and that FLSmidth Cement’s product innovation will play an important role in the decarbonisation of the industry”.
Chris Sznewajs, Founder and Managing Partner at Pacific Avenue Capital Partners, said: “We are honoured to be the trusted partner for FLSmidth on this highly complex transaction. We strive to be the buyer of choice for corporate sellers, with the ability to seamlessly complete cross-border transactions.
“The Cement division is an excellent fit within our portfolio, given our focus on acquiring market-leading companies. We are impressed with the Company’s ability to deliver innovative, mission-critical solutions
to its longstanding customers, and look forward to providing the necessary resources to support continued growth and value creation in partnership with management.”
Until the transaction is closed, FLSmidth Cement will continue to execute its GREEN 26 strategy and provide support and services to FLSmidth Cement.
