Helsinki, Finland, 2013-02-05 07:05 CET (GLOBE NEWSWIRE) -- YIT Corporation Stock Exchange Release 5.2.2013 8.05am
YIT proceeds into a new strategic phase and has begun demerger preparations of the company
The Board of Directors of YIT Corporation has decided in its meeting on 4 February 2013 to initiate preparations for the development of the Group’s business operations towards a new strategic growth phase. To accomplish this, the Construction Services business and the Building Systems business would be split-up into separate groups. The split-up has primarily been planned to take place in the form of a partial demerger of YIT Corporation.
”The future development of Construction Services and Building Systems as independent, separate groups enables more effective implementation of independent strategies, more focused management of the business operations, personnel development, as well as further enhancement of customer service. A clearer business structure increases the potential for shareholder value creation. The growth strategies of the companies are different, and we believe that the separate companies offer more attractive investment opportunities than the current setup”, states Henrik Ehrnrooth, the chairman of the Board of Directors of YIT Corporation.
Building Systems to form a new independent company, Caverion
According to the initial plan, YIT would continue to operate the Construction Services business consisting of Construction Services Finland and International Construction Services (combined reported net sales of EUR 1,929 million in 2012). Northern European Building Services as well as Central European Building Services (combined reported net sales of EUR 2,803 million in 2012) would in accordance with the plan of partial demerger be separated from YIT Corporation to a new independent company, Caverion, which will be listed on the Nasdaq OMX Helsinki.
Juhani Pitkäkoski, the current CEO of YIT, has been designated to prepare the organization and business operations for the Building Systems business. Correspondingly, YIT’s current Deputy CEO and Head of International Construction Services business, Kari Kauniskangas, is responsible for the organizational and business operations development for the independent Construction Services business during the preparation of the demerger.
Shares of new Caverion paid as demerger consideration to shareholders of YIT Corporation
In the partial demerger, YIT Corporation shareholders’ shareholding in YIT Corporation would remain unchanged. In addition, the shareholders would receive shares of the new Caverion as a demerger consideration in proportion to their shareholding in YIT Corporation. The ownership structures of the continuing Construction Services -group under YIT parent company and Building Systems -group under commencing Caverion parent company would correspond to that of the existing YIT Corporation at the time of the demerger.
The Board of Directors of YIT Corporation will later decide on the signing and registration of the demerger plan, based on which the Extraordinary General Meeting will decide on the potential demerger. The largest shareholders of YIT, Structor S.A., Mutual Pension Insurance Company Varma, Mandatum Life Insurance Company Limited and Mutual Pension Insurance Company Ilmarinen, which together represent approximately 28 % of the company’s shares and votes, have initially communicated a positive view regarding the transaction. According to the initial plan, the partial demerger and the listing of the shares of the new Caverion are intended to be executed during the year 2013.
The partial demerger requires financiers’ consent and re-arrangement of YIT’s financing. YIT has negotiated with its core banks and sufficient financing as well as back-up and guarantee facilities for the demerging businesses have been ensured. The company will continue negotiations with its financiers in order to finalize the financing arrangements.
YIT has received an advance ruling from the Finnish tax authority confirming the company’s view that the planned partial demerger is tax neutral to the company.
Successful implementation of the strategy makes the demerger possible
YIT’s current group structure has developed around the Finnish Construction Services. From the beginning of the 21st century, YIT’s Building Systems business has been grown and developed through acquisitions in the Nordic countries and Central Europe. The Building Systems business has provided YIT with significant growth potential as well as stable cash flows to finance e.g. the growth investments in the Construction Services business. The strategic investments in Russian Construction Services, which began in 2006, have brought substantial growth potential to the Construction Services business. Over the last three years, the Russian business operations have systematically and successfully been developed especially in terms of management of capital employed. As a result of this development, the Construction Services business is capable of financing and carrying out its operations independently. The Board of Directors believes that in order to further develop business operations and shareholder value, it is natural to transition to the next strategic growth phase as two separate groups.
For further information, please contact:
Juhani Pitkäkoski, CEO, YIT Corporation, +358 20 433 3301, juhani.pitkakoski@yit.fi
Hanna-Maria Heikkinen, Vice President, Investor Relations, YIT Corporation, +358 20 433 2635, hanna-maria.heikkinen@yit.fi
YIT Corporation
YIT is an established European service company in building systems and construction as well as in industrial sectors. More than 25,000 of our professionals serve clients in 14 countries in the Nordic countries, Central Europe, Russia and the Baltic countries. We have grown over the last hundred years with our clients and developed our services as the communities surrounding us have changed. We intend to continue following the same path. Our vision is to be the pioneer in creating and sustaining a healthy living environment. YIT’s net sales amounted approximately to EUR 4.7 billion in 2012. YIT's share is listed on Nasdaq OMX Helsinki. www.yitgroup.com