Sandvik to acquire majority stake in China-based cutting tool manufacturer Ahno
April 24, 2024
Sweden’s Sandvik has signed an agreement to acquire a majority stake (72.4%) in Suzhou Ahno Precision Cutting Tool Technology Co Ltd (Ahno), based in Jiangsu, China, from the current majority owner Ningbo Baosi Energy Equipment Co Ltd and related parties. Ahno will be reported within the business area segment Sandvik Machining Solutions.
Ahno is said to have a leading position in precision cutting tools in the fast-growing local premium segment, with a broad product-and service offering and an extensive sales, distribution and production footprint in China. The main customer industries are general engineering and automotive, in which a significant part is towards electric vehicles; medical being a growing segment for the company.
“This acquisition will strengthen our position in the strategically important Chinese market,” stated Stefan Widing, president and CEO of Sandvik. “Ahno’s competitive assortment and closeness to customers is a great platform to drive further growth of our tooling business in China. Much of the offering is focused on fast growing segments, like electric vehicles, which makes Ahno a perfect fit with our strategy.”
Ahno will form the basis of a new China-based division within Sandvik Machining Solutions, established following the closing of the transaction. Sandvik’s international tooling brands will continue to be operated in China as they are today. Ahno’s current market position, combined with Sandvik’s leading competence and international brand presence, is expected to enable an attractive growth platform in ‘China for China’ going forward.
“This acquisition is in line with our strategic ambition to grow in China and build a leading position in the local premium segment. In addition, Ahno enhances our local production capabilities, making it a great addition to Sandvik,” added Nadine Crauwels, President of Sandvik Machining Solutions.
Ahno was founded in 2002 and currently has around 1,200 employees. In 2023, the company generated revenues of approximately CNY 812 million (£90,145,771), mainly from China. The impact on Sandvik’s EBITA margin will be limited, though the impact on Sandvik’s earnings per share (excluding non-cash amortisation effects from business combinations) will be positive. The enterprise value for the acquired stake is CNY 1,456 million (£162,465,345) corresponding to a multiple of 10.9 x EV/EBITDA 2024. The transaction is expected to close during the third quarter of 2024 and is subject to customary closing conditions.
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