Mercor fire protection expects to close sale of part of its business in summer

"We plan to have the conditions precedent to the deal in place by the end of July, so we are hoping that July-August we will be able to close the deal," Mercor's deputy CEO Jakub Lipinski told the videoconference on Friday.

"Of course, I am not talking about the earn-out period, but the transfer of the business itself. Realistically I think it is summer," he added.

In November, Mercor reported that it had signed a preliminary agreement with the Kingspan Group for the sale of its gravity smoke and fire ventilation business. The total sale price for the shares is PLN 420 million (EUR 98.53 mln), with an amount of up to PLN 60 million (EUR 14.08 mln) deferred and subject to performance.

"I assess that this is a very good transaction. (...) We are convinced that we have a very good contract on the one hand, and on the other hand we are opening up to new products that we see will gain recognition on the market," said Mercor's CEO Krzysztof Krempec.

"The last two years we see that the market environment is weak (...). Making the change will be able to guarantee us dynamic growth," he added.

The company previously announced that it intends to use the funds raised from the sale to develop its other activities. At the same time, the company's management board plans to recommend that a significant part of the amount received from the transaction be used to pay dividends.

"A small acquisition is on our mind, but we rather want to buy a product, not a ready-made structure," CEO Krempec said.

"(...) There is a possible acquisition, but it will not affect the dividend payment. The vast majority of the funds will go towards the dividend," he added.

The board was also asked if there were plans to publish a strategy in connection with the transaction.

"I think that during the closing period of the transaction, in the summer, we will be ready with a new strategy," Krzysztof Krempec said.

According to the CEO, the market situation is difficult and the increase in orders in December is not a signal of a trend reversal.

In December 2024, Mercor secured orders worth around PLN 42 million (EUR 9.85 mln), up from PLN 31.6 million (EUR 7.41 mln) in the prior year period, an increase of 33 percent.

In the period from July to December 2024, the group secured orders worth around PLN 285.5 million (EUR 67 mln), against PLN 290.8 million (EUR 68.2 mln) in the prior year period, a decrease of 2 percent.

"The market atmosphere is weak, there are a lot of investments on hold and the effects of EU programmes are not visible. In terms of the volume investments we secure, we see a slowdown - both in Poland and in other countries where we operate," the CEO assessed.

As he added, orders in the market are there, but with a significantly lower average value.

"We have to pull everything out of the market to get the expected results. The market is difficult," Krempec stressed.

The Mercor group's product range includes gravitational smoke extraction, fire ventilation, fire protection of building structures and fire doors and gates. Additionally, the group's offering includes solutions in the area of fire safety 4.0 and energy storage.

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