ZURICH - Swiss machinery manufacturer Sulzer has entered into an agreement with leading high tech industrial group Oerlikon for the divestment of its surface solutions provider Sulzer Metco in an 850 million Swiss francs ( $950 million ) cash deal after taxes as part of plans to shed non-core activities. The acquisition will help to position Oerlikon as the world technology leader in surface solutions as the combined business will have pro-forma sales, which in 2012 was Swiss francs 1.2 billion , and a unique global footprint with more than 110 coating centers worldwide. The deal is based on an enterprise value - equity plus debt of Swiss francs 1 billion ( $1.1billion ), Sulzer said in a statement on Friday. After taxes, Sulzer would receive Swiss francs 850 million . The divestment agreement is subject to merger control and regulatory approval. Closing is expected in the third quarter 2014, the company stated Friday. "This transaction is an important step to focus Sulzer's activities on the three attractive key markets - oil and gas, power, and water. Sulzer wants to serve customers in its key markets as one focused company, achieving collaborative advantages and synergies across its businesses by leveraging its product portfolio, capabilities, and expertise," said Sulzer CEO Klaus Stahlmann . Sulzer Metco , with sales of almost CHF 700 million in 2012 and around 2 400 employees, is a leading surface solutions provider with a global presence. The business achieves about half of its sales in the transportation markets and about one-third in general industries. After the divestment, almost 80 percent of Sulzer's sales will be in the three key markets oil and gas, power, and water. Sulzer intends to use the funds generated from the divestment for targeted acquisitions and further investments toward organic growth in these key markets. "We are pleased that we have found a new owner for the Sulzer Metco division that will leverage the strengths of the business in the best possible way," said Stahlmann Metco, the world's largest maker of thermal spray coatings for the car, chemicals and energy industries, had sales of 690 million francs and earnings before interest, tax, depreciation and amortization of 91.7 million francs in 2012. The company has around 2,400 people on its rolls. Sulzer will report its annual results for 2013 on February 20, 2014 , with the results of Sulzer Metco to be reported as discontinued operations. Sulzer put Metco up for sale last year to concentrate on more lucrative businesses making pumps and equipment and providing services for the oil and gas industry. In a separate statement, Oerlikon said it plans to combine Metco with its existing coatings business to increase its market access. The combined business will operate around 130 facilities and employ some 6,000 people. "This step marks an important milestone for the Oerlikon Group , creating the technologically leading global product and service company for Surface Solutions," said Oerlikon CEO Brice Koch . "We are actively using our financial health and flexibility to shape a high-performing portfolio, which secures long-term profitable growth and value creation for all stakeholders in a sustainably growing industrial business close to our core."
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