Gelsenkirchen, Germany, 17 December 2008. As part of its move to focus on the profitable core business of high-tech hose systems, Masterflex AG sold its subsidiary DICOTA GmbH. DICOTA is a leading provider of laptop bags, case solutions and mobile computing accessories. The sale went through despite the difficult economic climate.
The selling price, which includes a debtor warrant, is as much as EUR 13.6 million. After deducting selling costs and adding in the repayment of shareholder loans, Masterflex AG stands to gain liquid funds of EUR 15.5 million maximum. This will be used primarily to reduce net debt. In accordance with IFRS, this transaction is expected to result in a loss of about EUR 9.0 million not yet reflected in the earnings forecast. The precise effect will become clear after the deconsolidation is complete.
DICOTA had been part of the Masterflex Group since 2001. DICOTA is expected to have generated revenue for fiscal year 2008 comparable with that of the previous year, roughly EUR 50.0 million, and to see a noticeable drop in earnings before interest and taxes (EBIT) to about EUR 4.4 million. The sale of DICOTA GmbH is an important step in the strategic orientation of Masterflex AG towards the profitable core business of high-tech hose systems. Not only were there no synergy effects with the core business, but the broad expansion of DICOTA in recent years had a negative financial impact on the Masterflex Group. The subsidiary contributed heavily to the increase in net debt and worsened the cash flow situation.