Sandvik to Acquire China-Based Company

Sandvik Acquires China-Based Cutting Tools Manufacturer Sandvik has signed an agreement to acquire 67% of Chuzhou Yongpu Carbide Tools Co., Ltd, a China-based premium solid round tools manufacturer, with a call option to purchase the remaining stake within three years. Chuzhou Yongpu Carbide Tools Co., Ltd focuses primarily on global and local OEMs and affiliated suppliers operating in China. Its capabilities encompass the complete solid round tools production value chain, including blanks, cutting tools, regrinding and coating services. The company will report to Sandvik Coromant, a division of Sandvik Manufacturing and Machining Solutions. Stefan Widing, President and Chief Executive Officer of Sandvik, said: "The acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd is part of our strategy to increase market share in our machining solutions business, establish a leading position in solid round tools and further expand in the Asian market. We look forward to welcoming Chuzhou Yongpu Carbide Tools Co., Ltd into the Sandvik Group." Chuzhou Yongpu Carbide Tools Co., Ltd will continue operating under its own brand, focusing on developing its offering and market share with the ambition to become a leading premium provider of solid round tools in China. The combined expertise and footprint of Sandvik Coromant and Chuzhou Yongpu Carbide Tools Co., Ltd will drive further geographic expansion in the region, particularly for cutting tools. Nadine Crauwels, President of Sandvik Machining Solutions, said: "We have a long-term strategic commitment to strengthen and develop our business. China is a rapidly growing market for solid round tools and the acquisition of Chuzhou Yongpu Carbide Tools Co., Ltd will further strengthen our presence and enhance the offerings we provide to our customers. Chuzhou Yongpu Carbide Tools Co., Ltd, with its leading market position and strong customer focus, is an excellent fit for Sandvik Machining Solutions." Chuzhou Yongpu Carbide Tools Co., Ltd is headquartered in Chuzhou, China and has approximately 500 employees. The company generated revenues of approximately SEK 400 million during the twelve-month period between the second quarter of 2020 and the first quarter of 2021, with an EBITDA margin that was slightly dilutive for Sandvik Manufacturing and Machining Solutions. The impact on earnings per share will initially be neutral. The transaction is expected to close in the third quarter of 2021.