Today, Italian company LU-VE announced it would acquire the commercial and industrial refrigeration arm of Swedish firm Alfa Laval’s air-heat exchange business AL Air.

“With the acquisition, the Group will be among the three largest global operators in the sector,” said LU-VE President Iginio Liberali. “It will reinforce our capability to offer services and components of high quality and reliability.” 

LU-VE will purchase 65% of the AL Air business – a 400 people business – from Alfa Laval once 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) have been calculated, and another 15% of the business one year later. The remainder (20%) should be purchased after taking into account EBITDA 2019-2020 (two years after the closing date) but LU-VE can also decide to anticipate the last payment based on EBITDA 2018-2019. 

The estimated cost of buying 100% of the AL Air business is estimated to be between €66-67 million, and is to be paid by LU-VE with available cash.

The AL Air business has been doing well in the past 12 months, ending June 2018 with revenues of €97.8 million and an EBITDA of €7.5 million.

“This business has made big improvements the last two years both in terms of growth and profitability,” said Tom Erixon, president and CEO of the Alfa Laval Group. “However we came to the conclusion it would have even better opportunities to continue developing under the ownership of the LU-VE Group.”

Both LU-VE and Alfa Laval manufacture heat exchangers, used in commercial refrigeration, for ammonia, CO2 and hydrocarbons. “This acquisition also has the sense of maintaining in our country the research and manufacturing of the most advanced products, in terms of the application of ‘green’ refrigerants, energy savings and respect for the environment,” Liberali said.

The managing directors of LU-VE will tell investors more about the deal during a 10:00 am conference call on 14 December.

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