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The Board of Directors of Scanfil EMS Oy, a subsidiary of Scanfil plc, has decided to sell the entire share capital of its subsidiary Scanfil (Hangzhou) Co., Ltd. located in Hangzhou, China, for a selling price of EUR 18.4 million to Hangzhou Cabinet Technology Co., Ltd. According to the agreement signed by the parties, the closing of the transaction is subject to certain usual pre-conditions, which are expected to be met during the next few weeks. The Scanfil Group will record the transaction amount in the third quarter of 2020.
Scanfil (Hangzhou) Co., Ltd. plant is focusing on sheet metal mechanics, with a turnover of EUR 29 million and the operating profit of EUR 2.2 million in 2019. The number of employees at the factory on 31 March 2020 was approximately 400. Scanfil will concentrate its Chinese operations on its factory in Suzhou, focusing on electronics manufacturing and demanding integration. Scanfil will continue to use the mechanics services of the Hangzhou plant also in the future.
Hangzhou Cabinet Technology Co., Ltd. is a Chinese mechanics manufacturer that will expand its operations and continue production at the Hangzhou plant. The entire personnel of the plant will continue to work for the sold Hangzhou company after the closing of the transaction.
As a result of the transaction, Scanfil updates its 2020 outlook and estimates that after the transaction, its turnover for 2020 will be EUR 580 – 620 million and adjusted operating profit EUR 38 – 42 million. Earlier Scanfil estimated its turnover for 2020 to be EUR 590 – 640 million and adjusted operating profit and EUR 39 – 43 million.
The non-recurring positive effect of the transaction on operating profit is approximately EUR 11 million. The final impact on the result is determined at the time of the closing of the transaction.
“I am pleased that we found to our Hangzhou mechanics unit a strong buyer, which will bring in new customers to the factory and knows the local mechanics market very well. I believe that the new owner can develop the operations of the Hangzhou factory positively long into the future. We will continue cooperation with Hangzhou Cabinet Technology as they will supply mechanical parts for the needs of our Suzhou electronics and integration factory,” says Petteri Jokitalo, CEO of Scanfil.
“We are happy to join forces with Scanfil Hangzhou and its highly skilled staff. Both Scanfil Hangzhou and Hangzhou Cabinet Technology are known for their customer-oriented and high-quality operations. We look forward to offering our combined capabilities to both existing and new customers,“ says Mr. Sun Yaoyuan, CEO and founder of Hangzhou Cabinet Technology Co., Ltd.