Hexagon Composites enters strategic transactions with Worthington Enterprises

Hexagon Composites ASA (OSE: HEX.OL) has announced the signing of two significant agreements with Worthington Enterprises (NYSE: WOR), marking a pivotal shift in its business strategy and reinforcing its commitment to the clean energy sector.

Sale of Hexagon Ragasco: Expanding Global Reach

Under the first agreement, Worthington Enterprises will acquire 100% of Hexagon Ragasco for an enterprise value of NOK 1,050 million, subject to adjustments based on the full year 2024 performance of Hexagon Ragasco. The adjustments could range from a decrease of NOK 50 million to an increase of NOK 100 million.

Hexagon Ragasco, a subsidiary of Hexagon Composites, is recognized as a market leader in the production of LPG composite cylinders, used across leisure, household, and industrial applications. With a manufacturing base in Norway and a market presence in over 100 countries, Hexagon Ragasco has carved a niche for itself in the global cylinder market.

Jon Erik Engeset, CEO of Hexagon Composites, highlighted the transaction’s strategic importance: “Hexagon Ragasco has been an important part of the Hexagon Group for over 20 years, and we take great pride in the position the company has developed to date. Worthington Enterprises is a highly respected player in our industry. This transaction will enable Hexagon Ragasco to grow in new geographies and verticals.”

Jimmy Bowes, President of the Building Products segment at Worthington Enterprises, expressed enthusiasm about the acquisition: “Hexagon Ragasco is one of the pioneers of the composite cylinder. For more than 20 years, they’ve been bringing innovative products to the market that are raising expectations of the performance, quality, and capabilities of an LPG cylinder. We’ve followed their growth closely and believe that their composite cylinders are a great complement to our existing cylinder business. We can’t wait to get started with the exceptional team at Hexagon Ragasco.”

Strategic Investment in Sustainable Energy Solutions

Alongside the sale of Hexagon Ragasco, Hexagon Composites has also secured a 49% stake in Worthington’s Sustainable Energy Solutions (SES) business segment for USD 20 million. SES, a leading supplier in Europe, specializes in high-pressure cylinders and systems for the storage and distribution of compressed natural gas, hydrogen, and industrial gases, boasting revenues of EUR 127 million and an adjusted EBITDA of EUR 2.9 million in 2023.

Engeset commented on the synergy between the transactions: “Through our dialogue with Worthington on the sale of Hexagon Ragasco, we identified an opportunity for Hexagon within Worthington’s Sustainable Energy Solutions business. Together, these transactions support Hexagon’s strategic focus on high pressure, clean energy solutions.”

Closing and Future Outlook

The sale of Hexagon Ragasco is anticipated to close around June 3, following a strategic review initiated by Hexagon in September 2023. The acquisition of the stake in SES has already been completed. DNB Markets and Danske Bank served as financial advisors, while Schjødt and Saxinger Rechtanwalts provided legal counsel to Hexagon Composites on these transactions.

These strategic moves not only enhance Hexagon’s focus on clean energy solutions but also ensure the company’s continued growth and adaptation in a rapidly evolving global market.