FLSmidth has confirmed it has entered into an agreement to sell its cement business which is expected to close this year.
The company has agreed to a deal to sell an affiliate of Pacific Avenue Capital Partners. The global equity firm specialises in carve-outs and other complex transactions.
It comes after FLSmidth launched a “strategy journey” including pure-play strategies for its cement and mining businesses in 2023. This included strengthening their market positions with a focus on core technologies and services for those respective industries. Last year, FLSmidth announced it would exploring divesting its cement business.
FLSmidth board of directors chair Mads Nipper said the deal would enable the cement business to maximise its full potential.
“I am incredibly proud of what our Cement business has achieved in its more than 140-year long history with FLSmidth,” he said.
“We firmly believe that this divestment represents a pivotal step in unlocking the full potential for both our Mining and Cement businesses. Our cement business is now well positioned for future success, with the flexibility to pursue its strategic ambitions and create exciting new opportunities for its employees to innovate and grow.”
FLSmidth chief executive officer Mikko Keto said the move would strengthen the company’s mining business going forward.
“The divestment allows us to sharpen our focus on our core Mining business, positioning FLSmidth as a pure-play leader in the mining industry,” he said.
“With a clear and focused Mining strategy, we are confident that we are well positioned to drive long-term value for our customers, shareholders and other stakeholders and enhance our competitive position.”
The transaction is expected to close during the second half 2025, subject to customary closing conditions, including regulatory approval from the relevant authorities.
The details
The deal includes a total initial consideration of EUR 75 million, corresponding to approximately DKK 550 million (Enterprise Value), plus a conditional deferred cash consideration of up to EUR 75 million, corresponding to approximately DKK 550 million.
The transaction includes all related employees, assets, intellectual property and technology. Certain legacy contracts and the Air Pollution Control (APC) asset will be retained by FLSmidth with immaterial impact on the continuing mining business.
“We are excited to acquire FLSmidth Cement, a global leader providing mission critical equipment and aftermarket solutions in the cement sector,” Pacific Avenue Capital Partners partner and investment committee member Jason Leach said.
“The business has a rich history and strong brands including Fuller, Pfister, and Ventomatic. We believe that cement will continue to play a crucial role in global economic development, and that FLSmidth Cement’s product innovation will play an important role in the decarbonisation of the industry.
Pacific Avenue Capital Partners founder and managing partner Chris Sznewajs added: “We are honoured to be the trusted partner for FLSmidth on this highly complex transaction. We strive to be the buyer of choice for corporate sellers, with the ability to seamlessly complete cross-border transactions.
“The cement division is an excellent fit within our portfolio given our focus on acquiring market leading companies. We are impressed with the company’s ability to deliver innovative, mission-critical solutions to its longstanding customers, and look forward to providing the necessary resources to support continued growth and value creation in partnership with management.”
