Landi Renzo Moves to Acquire SAFE

| Italy, Cavriago (Reggio Emilia)

Alternative fuel systems provider Landi Renzo has forwarded to Agave s.r.l., a company in liquidation about to submit an application for composition with creditors, an irrevocable proposal for temporary rental and subsequent acquisition of the SAFE business branch. Through the trademark SAFE, Agave has been operating for more than 35 years in the production of compressors for gas processing for a wide range of applications. Its main business areas include compressed natural gas (CNG) refuelling stations for vehicles and plant for the processing of biomethane, hydrogen and liquefied natural gas (LNG).

The transaction, aimed at allowing the distressed company to continue operations and to be relaunched while limiting the impact on employees, is part of the strategy of Landi Renzo which considers the possibility of expanding its own product portfolio with SAFE’s know-how in the production of “CNG stations” as a competitive factor. Landi Renzo believes that, with a view to industrial integration, refueling stations could parallel the development of the use of methane as a fuel or even to boost it.

Landi Renzo’s CEO Claudio Carnevale, explained the acquisition will help the Landi Renzo Group advance its technological goals and solutions in the field of low environment impact transportation.

Rental of the business branch, in preparation for the acquisition, is subject to some suspension clauses; the final acquisition is subject to approval of the composition plan which Agave will propose to its creditors.

The financial outlay for the transaction can be estimated at around 10 million euro (USD 12.4 million); around 2 million euro for the acquisition of the business branch and around 8 million euro for the acquisition of Agave inventories. During 2011 Agave achieved a turnover of around 27 million euro (USD 33.6 million) through SAFE.

It is expected that the business branch becomes effective from the beginning of next July: it can be estimated that such a business could contribute around 10 million additional euros to revenues of the Landi Renzo Group for the current financial year.

(This article compiled using information from a Landi Renzo press release)

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