Monday 27 June 2022

Sweden-based engineering company Sandvik has signed an agreement to acquire 100% of the equity interests of the Portugal-based polycrystalline diamond tools manufacturer Frezigest, SGPS, the company said.

Frezite's offering primarily consists of made-to-order polycrystalline diamond tools for metal and wood applications, with exposure to the automotive, general engineering and aerospace segments.

The company will be reported within Walter, a division within Sandvik Manufacturing and Machining Solutions.

Frezite enhances Walter's product offering within PCD aluminum products.

The company is present in Europe, Mexico and Brazil, and with its speed to market capabilities it improves Walter's value proposition and position as a manufacturer of advanced components in lightweight materials.

Frezite's competence and offering of clamping and fixtures solutions will allow Walter to offer turnkey solutions which implies interaction earlier in the customer's value chain, Sandvik said.

In addition, Frezite adds adjacent revenue potential for Walter in the premium wood and composite segment.

Frezite, founded in 1978, has around 450 employees and is headquartered in Trofa, Portugal. In 2021, the company generated revenues of approximately SEK 450m and is expected to grow at a mid-single digit organic growth rate in the medium term.

The EBITA margin is slightly dilutive to Sandvik Manufacturing and Machining Solutions. Impact on Sandvik's earnings per share will be limited, yet slightly positive. The parties have agreed not to disclose the purchase price.

The transaction is expected to close during 3Q22 and is subject to customary closing conditions.