Tikkurila has on April 19, 2011 entered into an agreement to acquire the business operations of Serbian paint company Zorka Color. The seller of the operations to be acquired is Zorka Color d.o.o. and its subsidiaries, and the buyer is Tikkurila Oyj and its subsidiaries. The acquisition will strengthen Tikkurila's position, in accordance with the company's strategy, in Central Eastern Europe and in the Balkans in particular.
According to Zorka Color, the company's revenue in 2010 was approximately EUR 16.2 million, operating profit (EBIT) EUR 1.0 million, and the average number of employees some 150.
The completion of the acquisition requires an approval from the competition authorities and the fulfillment of the other terms and conditions of the transaction, which are estimated to be concluded by the end of June 2011. The purchase price will be specified before the closing, and the price will be partly based on the future results of the business operations to be acquired.
Zorka Color's corporate and product brands, customer relationships, other intangible rights, machinery and equipment, as well as the net working capital tied into the business are included in the transaction. However, land, buildings and interest-bearing debt of the target are not included in the acquisition. In the acquisition, a long-term lease agreement was also signed, enabling Tikkurila to lease a production facility located in Sabac, Serbia, from Zorka Color. Zorka Color's employees will become Tikkurila's personnel.
In addition to Serbia, Zorka Color also operates in Macedonia, Bosnia-Herzegovina, Montenegro, Croatia, and Kosovo. According to estimates by Tikkurila's management, Zorka Color is one of the three largest players in Serbia and the largest player in Macedonia in the decorative paints business. Trademarks to be transferred to Tikkurila in the acquisition include, for example, Linea, Decolux, Zoralux, and Mixline.
"The acquisition of Zorka Color's business operations strengthens Tikkurila's position in Central Eastern Europe in accordance with our growth strategy. Through the acquisition, our geographical area expands into the Balkans, which is an interesting economic area. Zorka Color is a strong brand with a great product portfolio. The company's market position is strong in particular in Serbia," states Erkki Järvinen, President and CEO of Tikkurila Oyj.