Selling drives

Metso Corporation is to sell Metso Drives, a manufacturer of mechanical power transmission equipment, to CapMan, the Nordic private equity investor for about 98 million Euros.

Metso Drives, which employs about 890 people in Finland, Germany, Canada, the United States, and Sweden, reported net sales of 157 million Euros in 2004. The company supplies mechanical drives for the pulp and paper industry, and gears for wind turbines.

Metso Drives and its foreign subsidiaries will be transferred to the ownership of the CapMan funds after the relevant regulatory approvals.

Citing his reason for selling off the business, Jorma Eloranta, President of Metso Corporation, said that the biggest growth potential for the drives business was in the wind turbine sector and other sectors, which were not part of Metso’s core business.

Metso Corporation will book a tax-free capital gain of approximately 18 million Euros in 2005 relating to the deal.

In 2004, the net sales of Metso Corporation were around 4 billion Euros; the company has approximately 23,000 employees in more than 50 countries.