Thule Group divested its Snow Chain business Wednesday in order to tighten its focus on driving growth in its core Outdoor & Bags segment, which makes everything from car racks to backpacks, and cases for consumer electronics.
Thule Group agreed to sell its Snow Chain business to Schneketten AG, an Austrian company that is a leader in the snow chain sector.
“Our strategic focus is to continue to build on our market leading position in developing products that make it easy for active consumers around the world to bring the things they care for, when pursuing their interests,” said Magnus Welander, CEO, Thule Group. “In this context, the Snow Chain business was no longer a core business for us.”
The Snow Chain division posted sales of SEK$136 million and a negative underlying EBIT of -SEK$32 million in 2014. The financial results for the Thule Group proformance in 2014, excluding Snow Chains, would have been an underlying EBIT of SEK$718 million (2014 reported: SEK$686 million), with a higher underlying EBIT margin of 15.8 percent (2014 reported: 14.6 percent).
The purchase price consists of two components. One, an initial amount of €10 million, and two, an earn out amount (based on snow chain sales for the coming two winter seasons) of up to an additional €10 million. Half of the possible earn out component will be accounted for in the third quarter financials for the Thule Group. The divestment will lead to a reported capital loss of approximately SEK$120 million and an initial estimated positive cash effect of approximately SEK$90 million in the third quarter of 2015.
The Snow Chain division has 145 employees, with the majority employed at the production site in Molteno, Italy, where the head office is located. The sale is not conditional on any governmental or other external conditions and closed September 2, 2015.
In connection to this divestment, the board of directors also initiated a strategic review for Thule Group’s remaining business within the Specialty Segment, which includes its Work Gear business in the U.S.
Thule Group offers products within two segments: Outdoor & Bags (e.g. equipment for cycling, water and winter sports, roof boxes, bike trailers, baby joggers, laptop and camera bags, backpacks and cases for mobile handheld devices) and Specialty (pick-up truck tool boxes). Net sales for 2014 amounted to SEK$4.7 billion.
