Implications of the Intergraph acquisition
24 November 2010
On 6 July 2010, Hexagon AB entered into an agreement to acquire
the US-based software provider Intergraph Corporation for 2 125
MUSD on a cash and debt free basis. On 28 October 2010, all
approvals had been obtained and the acquisition was completed,
after which Intergraph is consolidated into Hexagon's accounts.
The integration of Intergraph and Hexagon proceeds according to
plan and previously communicated full-year estimates regarding
Intergraph and expected synergies remain the same.
Prior to the publication of the prospectus in connection with
Hexagon's rights issue and to facilitate the analysis of
Hexagon's 2010 year-end report and future development, certain
financial and accounting effects of the acquisition of Intergraph
are published.
Cash integration, transaction and refinancing costs will amount
to approximately 510 MSEK, of which approximately 380 MSEK will
be charged in the fourth quarter 2010. Remaining part,
approximately 130 MSEK relating to loans, will be capitalised and
amortised over the maturity of the loans, which is 5 years. The
majority of the approximately 510 MSEK will be paid during the
fourth quarter of 2010, while severance payments will be made
gradually during 2011.
In the fourth quarter 2010, Hexagon will also record non-cash,
non-recurring costs of approximately 670 MSEK. These items
affecting comparability are related to writedowns of overlapping
technologies in both Hexagon and Intergraph, as well as PPA
adjustments (Purchase Price Allocations), which primarily consist
of Hexagon being considered to have acquired the inventories of
Intergraph at market value and differences in revenue recognition
for prepaid income.
In the fourth quarter 2010, Hexagon will also record an
impairment charge of approximately 250 MSEK in relation to the
business area "Other operations". The impairment charge will not
have any cash impact.
MSEK | Total | Items affecting comparability Q4 2010 | Amortised over 5 yrs |
Cash costs | 510 | 380 | 130 |
Non-cash costs | 670 | 670 | - |
Other operations (non-cash) | 250 | 250 | - |
MSEK | Q1 – Q3 2010 | FY 2009 |
Net sales | 4 575 | 5 890 |
EBITDA | 1 097 | 1 372 |
EBIT | 929 | 1 101 |
Based on the average exchange rate for the respective period.
Full pro forma financial statements will be presented in the
rights issue prospectus.
For further information please contact:
Sara Kraft Westrell, Corporate Communications Director, Hexagon
AB, +46 8 601 26 23
Mattias Stenberg, IR Manager, Hexagon AB, +46 8 601 26 27
This press release may contain forward-looking statements. This press release consists of such information that Hexagon AB
When used in this press release, words such as "anticipate",
"believe", "estimate", "expect", "intend", "plan" and "project"
are intended to identify forward-looking statements. They may
involve risks and uncertainties, including technological advances
in the measurement field, product demand and market acceptance,
the effect of economic conditions, the impact of competitive
products and pricing, foreign currency exchange rates and other
risks. These forward-looking statements reflect the views of
Hexagon's management as of the date made with respect to future
events and are subject to risks and uncertainties. All of these
forward-looking statements are based on estimates and assumptions
made by Hexagon's management and are believed to be reasonable,
though are inherently uncertain and difficult to predict. Actual
results or experience could differ materially from the forward-
looking statements. Hexagon disclaims any intention or obligation
to update these forward-looking statements.
(publ) may be obliged to disclose in accordance with the Swedish
Securities Market Act and /or the Financial Instruments Trading
Act. The information was submitted for publication on 24 November
2010 at 08:00 CET.
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