ALTO finds through the integration with the Nilfisk-Advance group a natural industrial home with common culture and beliefs. The two companies are matching each other well as they share a common enterprise culture and complement each other strategically, geographically as well as in product terms. The integration of the activities of Nilfisk-Advance and ALTO creates the world's leading supplier of professional cleaning equipment. Element in growth strategy
The acquisition of ALTO follows an extended period of profitability and organic growth in Nilfisk-Advance. This trend is underlined by Nilfisk-Advance's development in the first quarter of 2004 with an organic growth of 8% and an EBITA margin of 8.9% (EBITDA margin of 11.0%).
The acquisition of ALTO is a key element in the realization of Nilfisk-Advance's strategy of becoming the world's leading supplier of professional cleaning equipment. This strategy includes both organic growth and growth by acquisitions, where acquisitions are made selectively in order to strengthen the market coverage and/or to extend the product portfolio. Global strength
The new company will be globally represented through own subsidiaries, with sales and service in 31 countries and have an extensive network of exclusive distributors in other countries. The company will have a combined turnover of around 630 mEUR. The operational profit in 2003 was 40 mEUR (Nilfisk- Advance 30 mEUR and ALTO 10 mEUR) and the number of employees was in total 3,600 (2,100 in Nilfisk-Advance and 1,500 in ALTO).
The acquisition of ALTO reinforces Nilfisk Advance's worldwide presence both through improved market coverage as well as through additions of new customer segments. In Europe
, Nilfisk-Advance will be significantly strengthened in the area of high-pressure washers for the professional and domestic user segments, compared with today where the company is a marginal player in this area. ALTO's program of wet/dry vacuums will also reinforce the company's presence in the industrial segment. In the United States
, ALTO's "Clarke" products combined with Nilfisk-Advance's floor care product program will cement the company's leading position in the commercial floor care segment. The company's position in the industrial segment will also be strengthened through the ALTO subsidiary American-Lincoln. In the Asia/Pacific region
, ALTO will add a new line of business through the company DEN-SIN, which is specialized in ultra high-pressure washers for primarily cleaning of ships. ALTO also sells conventional high-pressure washers in this region that will complement Nilfisk-Advance's activities. Synergies
Nilfisk-Advance and ALTO are organizations with similar business systems and complementary customer segments and geographical coverage. The combination of the activities gives the new company opportunity to improve its efficiency within product development, production, logistics, administration and sales. The initiated transfer of ALTO's production from Germany and Denmark to Hungary and China provides further a good basis for optimization of production in the integrated company.
The acquisition will also enable the new company to operate with a competitive multi-brand concept that draws advantage of common product development, logistics, production and sourcing. Purchase price
The agreed purchase price on a debt free basis (Enterprise Value) is 900 mDKK. This price assumes the existence of a net working capital of 500 mDKK at the takeover date. If the net working capital at the takeover date differs from this amount the purchase price will be adjusted accordingly.
The purchase price reflects the fact that ALTO's acquisition is taking place midway through its high season, as a result of which the working capital at the takeover date is very high. By way of comparison, the net working capital at 31 December 2003 stood at 327 mDKK. A pro forma purchase price at this date is 727 mDKK. Performance target
The financial targets for the new company are to achieve a growth, measured over a business cycle, with a minimum of 6% per year and reaching an EBITA-margin of 10% (EBITDA-margin of 12%). We expect to realize this target when the integration of ALTO is fully implemented. Management
Johan Molin, Nilfisk-Advance, is appointed President and CEO of the new Nilfisk-Advance/ALTO organization. The future Executive Board will be established when the approval of the competition authorities has been obtained and the transaction is thereby finalized. Historic background
Today, both Nilfisk-Advance and ALTO are organizations created through acquisitions and mergers of companies in the same business sector.
This process has led to the two Danish companies separately becoming major suppliers of cleaning equipment to the world market. In Nilfisk-Advance the emphasis is on floor care machines/vacuum cleaners, and in ALTO on high pressure washers/floor care machines. Nilfisk-Advance
||Fisker & Nielsen founded |
||Gerni (high-pressure washers) acquired by Fisker & Nielsen |
||Fisker & Nielsen joined the NKT group |
||Advance Machine Company, USA (floor care machines) acquired |
Schwamborn, Germany (industrial vacuum cleaners) acquired
||Fisker & Nielsen renamed Nilfisk-Advance A/S |
||Euroclean/Kent product program (commercial cleaning equipment) acquired from Electrolux |
||CFM, Italy (industrial vacuum cleaners) acquired |
||Ecologica, Italy (sweepers) acquired |
G-Power, Australia, acquired
Products and customer segments
||KEW Industries (high-pressure washers) acquired by Incentive |
||Scanio Flow Equipment (low-pressure washers) acquired |
||KEW and Scanio merged to become KEW Industries |
Simpson Cleaning Systems Inc., USA, acquired and named KEW Industries Inc.
||Clarke Holding Corporation, USA (floor care machines) acquired |
MSW Industries, USA, (high-pressure washers) acquired
||KEW Industries and Clarke integrated under the name of ALTO |
||WAP Reinigungssystem GmbH acquired |
||DEN-SIN Cleaning Systems Pte. Ltd. (Singapore) acquired |
Scrubbers and sweepers, wet/dry vacuums, industrial vacuums, carpet cleaners and high-pressure washers. Nilfisk-Advance includes the brands Nilfisk, Advance, Euroclean, Kent, CFM and Ecologica.
Nilfisk-Advance's products address primarily the professional commercial cleaning sector - which comprises institutional and
industrial customers as well as contract cleaners. ALTO
High, ultra-high and low-pressure washers, wet/dry vacuums, scrubbers, sweepers and floor sanders. ALTO includes the brands KEW, WAP, Simpson, DEN-SIN, Scanio, American-Lincoln, American Sanders and Clarke.
ALTO's customer segments are primarily within agriculture, automotive, industry, building and construction, food, contract cleaning and do-it-yourself consumers. Production
||Denmark, Sweden, Italy, United States |
||Denmark, Germany, Hungary, United States, |
Singapore and China
||Represented by subsidiaries in 29 countries |
||Represented by subsidiaries in 16 countries. |
The primary market areas of both companies are Europe, North America and the Asia/Pacific region. For further information please visit: