Acquisition of MADE - Gamesa
Acquisition of MADE - Gamesa
Acquisition of MADE - Gamesa
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<strong>Acquisition</strong> <strong>of</strong> <strong>MADE</strong><br />
June 2003
Agenda<br />
Transaction’s Transaction s Details<br />
Strategic Rationale<br />
Conclusion<br />
2
Agenda<br />
Transaction’s Transaction s Details<br />
3
Transaction’s Transaction s Details<br />
Terms <strong>of</strong> the Agreement<br />
<strong>Gamesa</strong> and Endesa have reached an agreement for the purchase<br />
<strong>of</strong> Endesa’s Endesa WTG manufacturing division, Made. The main<br />
conditions are the following:<br />
<strong>Acquisition</strong> <strong>of</strong> Made:<br />
Equity Value: EUR 25 MM<br />
Enterprise Value: EUR 119 MM<br />
Current Financial debt for EUR 94 MM is extraordinary due to<br />
working capital needs and we estimate to be reduced by year end<br />
to EUR 40 MM.<br />
Made’s Made Backlog:<br />
Made has contracts with Endesa and other companies to supply<br />
WTG equivalent to 1,300 MW.<br />
Made will have a First Right <strong>of</strong> Refusal for further 300 MW <strong>of</strong> WTG WTG<br />
The Agreement includes the acquisition <strong>of</strong> 100% <strong>of</strong> Made’s Made s shares with<br />
a backlog to supply 1,190 MW <strong>of</strong> WTG to Endesa and other companies.<br />
4
Agenda<br />
Strategic Rationale<br />
5
Strategic Rationale<br />
Endesa, Endesa,<br />
a Strong Partner<br />
Significant backlog. Endesa will buy 890 MW <strong>of</strong> WTG to <strong>MADE</strong><br />
Possibility to grow. First Right <strong>of</strong> Refusal for further 300 MW<br />
Huge Growth Potential in Europe and the LatAm Market (Endesa is<br />
very well positioned in Italy, Italy,<br />
France, France Brazil and Chile)<br />
Access to third party companies related to Endesa.<br />
<strong>Gamesa</strong> starts a new relationship with Spain’s Spain s tier 1 “Utility Utility”<br />
6
Strategic Rationale<br />
Sinergies. Sinergies.<br />
Margin Improvement<br />
Margin Improvement<br />
20%<br />
9%<br />
EBITDA mg Net Incomes / Sales<br />
<strong>MADE</strong> <strong>Gamesa</strong> Eólica<br />
Cost Improvements<br />
Product Range Rationalisation<br />
Increased supplies volume<br />
Modular Vertical Integration<br />
applied to Made<br />
<strong>Gamesa</strong> expects to improve the company’s company s margins substantially<br />
7
Strategic Rationale<br />
Sinergies. Sinergies.<br />
Capex, Capex,<br />
Overheads & Others<br />
Made runs a Nacelle assembly facility in Spain avoiding required<br />
capex <strong>of</strong> <strong>Gamesa</strong> Eólica lica<br />
Improved Sunk Cost absorption due to bigger scale<br />
Increased R&D team. Experience in WTG integral design<br />
Experience in Solar Thermal Energy<br />
Made’s Made s structure will complement <strong>Gamesa</strong> increasing its value<br />
8
Strategic Rationale<br />
A Bigger Player<br />
Historical WTG Manufacturer Rankings 2002 World Market Shares<br />
Yearly Installation (MW) 2001 2002<br />
Vestas 1648 1605<br />
Enercon 1036 1334<br />
<strong>Gamesa</strong> + <strong>MADE</strong> 926 1171<br />
Neg Micon 874 1033<br />
<strong>Gamesa</strong> 735 924<br />
GE Wind 865 638<br />
Bonus 593 509<br />
Nordex 461 504<br />
<strong>MADE</strong> 191 247<br />
Repower 133 223<br />
Other 539 419<br />
Total 7075 7436<br />
Source: Source:<br />
BTM WMU March 20003<br />
Bonus<br />
7%<br />
GE Wind<br />
9%<br />
Nordex<br />
7%<br />
Neg Micon<br />
14%<br />
Repower<br />
3%<br />
Other<br />
6%<br />
Made + <strong>Gamesa</strong><br />
15%<br />
The new company ranks top 3 in the world market.<br />
Vestas<br />
21%<br />
9<br />
Enercon<br />
18%
Strategic Rationale<br />
Accretion Dilution Analysis<br />
MW Sold<br />
Min EBITDA mg<br />
Min ROS<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
2003(*)<br />
150<br />
8%<br />
3%<br />
MW installed and Minimum Margins<br />
2003 2004 2005 2006 2007<br />
MW EBITDA mg > Net Income / Sales ><br />
Accretion Dilution Analysis<br />
The transaction is value enhancing from an EPS perspective.<br />
(*) Only H2 2003 is accountable for <strong>Gamesa</strong><br />
2004<br />
300<br />
11%<br />
5%<br />
20%<br />
18%<br />
16%<br />
14%<br />
12%<br />
10%<br />
8%<br />
6%<br />
4%<br />
2%<br />
0%<br />
€ 0,25<br />
€ 0,20<br />
€ 0,15<br />
€ 0,10<br />
€ 0,05<br />
€ 0,00<br />
2005<br />
350<br />
18%<br />
8%<br />
2006<br />
400<br />
18%<br />
8%<br />
2002 2003 2004 2005 2006 2007<br />
Inc <strong>Gamesa</strong> EPS<br />
2007<br />
400<br />
18%<br />
8%<br />
10
Agenda<br />
Conclusion<br />
11
Conclusion<br />
Value Creation and Visibility Improvement<br />
Relationship with Endesa. Endesa <strong>Gamesa</strong> opens a big new relationship / customer.<br />
Improved Backlog. <strong>Gamesa</strong> increases its backlog by 25%<br />
Fair Value. <strong>Gamesa</strong> has paid a fair value for the Company.<br />
Sinergies. Sinergies The margin differential and the existence <strong>of</strong> Spanish facilities Increase<br />
Value for <strong>Gamesa</strong>.<br />
EPS Enhancing. All the above leads to an EPS enhancing transaction<br />
Value Creation and Visibility Improvement<br />
12
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