16 June 2017

Buzzi Unicem acquires 100% of Zillo group

Today Buzzi Unicem SpA has signed a mandatory agreement to buy 100% of the share capital of Cementizillo SpA. The agreement has been signed by Alvise Gino Zillo M. X., as sole director of the majority shareholder Giovanni Zillo M.X. & C. Srl, holding 52.1% of the share capital. Within such agreement, today Buzzi Unicem has also purchased 47.9% of the share capital of Cementizillo SpA, directly from the minority shareholders. The remaining 52.1% is expected to be acquired on the first days of July (closing), following the prior settlement of some non-core assets that do not lie in the interest of Buzzi Unicem.

Zillo is a leading industrial group, founded in 1882 and focused on the cement and ready-mix concrete industry in the North-East of Italy. The firm operates with two full-cycle cement plants (Fanna, province of Pordenone and Monselice, province of Padua) and about 40 batching plants. In 2016, Zillo's cement and clinker sales came in at approximately 1.1 million tons and ready-mix concrete volumes amounted to about 440,000 cubic meters.

In 2016, consolidated net sales of Zillo group stood at €90 million and Ebitda at €10 million (of which €5 million non-recurring). Ebit was negative for €4.0 million and the company closed the year with a loss of €6.0 million. At 31 December 2016 net debt amounted to €46 million.

The agreed amount for the share purchase foresees a fixed portion, equal to €60 million plus 450,000 Buzzi Unicem ordinary shares already in treasury, and a variable portion that may range from a minimum of €0 (zero) to a maximum of €21 million, depending on the trend of the average cement price achieved by Buzzi Unicem in Italy in the years from 2017 to 2020. The variable portion is unpredictable and payable to the majority shareholder only. The acquisition is supported by usual warranties for similar transactions, 100% issued by the majority shareholder.

The payment of the minority shareholders has been carried out today for €22.6 million. The payment of the 52.1% stake will be made for €19 million at the closing date together with the transfer of the 450,000 Buzzi Unicem ordinary shares; for €3.4 million 120 days after the closing date, considering an adjustment based on the changes in working capital and net financial position occurred between 31 December 2016 and the closing date; for €7.5 million one year after the closing date and, finally, for another €7.5 million three years after the closing date. The commitments already borne as well as the ones planned for the completion of the transaction will be funded through cash and/or existing credit facilities that are immediately available.

Through the acquisition of Zillo group, Buzzi Unicem, in addition to strengthening its presence and market share in Italy, aims at contributing to the rationalization and consolidation of the domestic cement sector, which nowadays suffers from a significant surplus of production capacity coupled with permanently reduced sales volumes. The combination will also have, ceteris paribus, a positive impact on Buzzi Unicem's profitability. Furthermore some synergies arising from economies of scale and the integration of the main organizational functions are expected, which will also contribute to improving the operating results of the Italian market.

Company contacts:
Investor Relations Assistant
Ileana Colla
Tel. +39 0142 416 404