FLSmidth announced that it has entered into an agreement to divest its cement business to an affiliate of Pacific Avenue Capital Partners, a global private equity firm focussed on carve-outs and other complex transactions, for a total initial consideration of EUR75m, corresponding to approximately DKK550m (enterprise value), plus a conditional deferred cash consideration of up to EUR75m, corresponding to approximately DKK550m.
In early 2023, FLSmidth embarked on a strategic journey with the announcement of new pure-play strategies for its mining and cement businesses. 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, 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 strengten 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, comments: “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 focussed 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, comments: “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, comments: “We are honoured to be the trusted partner for FLSmidth on this highly complex transaction."
The transaction includes all related employees, assets, intellectual property and technology. Certain legacy contracts and the Air Pollution Control (APC) asset will be retained by FLSmidth with immaterial impact on the continuing mining business.
The transaction is expected to close during the second half 2025, subject to customary closing conditions, including regulatory approval from the relevant authorities.
