Good morning, everyone, and welcome to today's webcast. My name is Carlos Lora-Tamayo, and I am the Chief Investor Relations and Communication Officer of Acerinox. First of all, thank you very much for joining us today on such as short notice.
As you know, we announced today that we have entered into an agreement to acquire Haynes International, U.S.-based producer in high-performance alloys. We are proud of this decision and are confident that it will strengthen our business in line with our strategy to increase our exposure in high added value material. For those of you who follow our Capital Markets Day, the topside of the pyramid. This acquisition not only solidifies our industrial leadership in the U.S., but our global position in stainless steel and high-performance alloys.
And now let me introduce our main speakers today. Today the presentation will be led by our Chairman, Carlos Ortega; our CEO, Bernardo Velazquez; VDM CEO, Dr. Niclas Muller; and last but not least, Acerinox CFO, Miguel Ferrandis.
Without further ado, I would like to give the floor to our Chairman. Please, Carlos, go ahead.
Thank you, Carlos, and thank you all for attending this presentation. As you may have seen this morning, we have very exciting news. We have reached, as Carlos has said, an agreement for a U.S. deal in high-performance alloys for our U.S.-based North American stainless, NAS, to acquire 100% of Haynes International, another U.S. company, a player in high-performance nickel and cobalt alloy.
NAS, as you know, is 100% owned subsidiary of Acerinox. This transaction is fully aligned with Acerinox strategy, as you may have seen in the recent Capital Markets Day in Germany. This is a strategic investment. It's not a financial one, it is not opportunistic one. This supports our strategy towards higher value-added products, specialty stainless, and high-performance alloys. This expands our already strong presence in the U.S. market and increases our exposure to the aerospace segment, creating a very solid growth platform.
Also, this strengthens our already strong global leadership position in high-performance alloy segment, led by VDM and in our case, Niclas who will speak later. This strong -- we expect a very strong financial performance of Haynes going forward that will deliver significant pro forma growth and margin enhancements.
We are becoming an R&D, research and development powerhouse. We are adding extensive R&D capabilities with Haynes and their very strong patent portfolio. We will also unlock sizable potential synergies of circa $71 million. Niclas will explain this a bit better later, but these are already identified synergies, both on the revenue and cost side. And we have credible synergies. We have already achieved synergies in a very strong way with our VDM acquisition, in this case, led by Bernardo and Niclas himself.
We are very happy that there are strong ESG performance of Haynes and the commitments will be further strengthened with Acerinox ownership. Valuation, we're offering a share price of $61 per share, which represents a fully diluted equity value of close to $800 million. This implies 8.7% premium to last Friday's close and a 22% premium to a 6-month weighted average price of Haynes. This purchase price represents a multiple EV/EBITDA multiple of 10.1x 2024 consensus estimates, which will -- broke down to 5.8x once we include the synergies that we're going to achieve.
This meets all our KPIs. This meets our 15% target of return on capital employed that we discuss at our market -- Capital Markets Day already in year one and it will be already accretive, 11% accretive from an EPS basis, earnings per share basis from year one as well. This, again, will be further explained by our CFO, Miguel. Miguel will also explain that this will be fully funded with our cash -- existing cash position actually in NAS and Acerinox's balance sheet in North American Stainless. The pro forma leverage EV to EBITDA will increase to 1.5x, but we will go back to our target of 1.2x EV/EBITDA pro forma net debt to EBITDA for next year already.
This will not change our dividend policy. Our shareholder remuneration will stay the same. The conditions are, we expect the shareholders' approval of Haynes. They will call for an extraordinary general meeting for shareholder's approval, and there will be other customary regulatory approvals, CFIUS, antitrust and others. Timetable is that we expect this deal to close by the third quarter of this year.
Let me reemphasize that this is a strategic investment. It is not a financial one nor an opportunistic one. We truly believe in the outstanding platform we are creating in the U.S. and in HPA to generate significant value to our shareholders.
Bernardo?
Thank you, Carlos. As you mentioned, it is completely aligned with our strategy and have a very strong rationale. For many of you that attended our Capital Markets Day, it is not unexpected. And we are very happy and very excited to announce this transaction today.
In that, based on our recent experience with the integration of VDM, that was mainly done in Europe, we have found the possibility to extend our presence in United States by creating a platform that will integrate NAS, North American Stainless with VDM United States and Haynes. And the combination will be the best and the biggest stainless steel and HPA platform in the United States, a one-stop floor with the widest portfolio of products in the industry from commodity stainless steel to tailor-made stainless steel and the most sophisticated alloys, all in flat and in long products.
The Acerinox Group will grow in the United States, will grow in high-performance alloys and high added value products. And in aerospace, all areas of a high potential. Haynes will be easily integrated in our group due to its long tradition in specialty metals manufacturing, it's committed and skilled people and its reputation, in R&D, quality, and good customer service. I think it is not just a company. It is a group of talented and experienced people with a leading position in number and development of new patents and with action to the most exigent customers in the industry that is very difficult to obtain.
Both groups will benefit of the group knowledge and opportunities that will contribute to make Haynes better with the modernization of the equipment, with the increase of capacity. The combination with NAS and VDM USA will increase the product range and, of course, the customer base and customers will also benefit of the widest commercial network in our industry.
Haynes will benefit of the Acerinox purchasing power because in a similar industry equipment, most of the equipment, consumables and raw materials are almost the same. Also a main [ Haynes ] location in Kokomo, Indiana is only two hours away from our North American Stainless facility. So with this situation, will let us process some HPA in North American Stainless, and some in stainless steel in Kokomo. So it will increase the range of our products. And of course, we will continue supporting our people as usual, and the local communities, what we are very proud of continuing with our legacy.
The price offered is a good value for Haynes shareholders and opens an exciting future for the Acerinox shareholders, creating value since day 1. So I think it's a great combination of two groups that will make something better, as we used to say, 1 plus 1 is more than 2.
Well, today, we are explaining is a combination of two leading American businesses. You know that most than any other, we are an American group, 50% of our sales is in North America. Our strong market is North America. But in addition, what's clear is that actually, North America is in our sector, the best-performing market, is the one who is expected to perform a more robust growth. In addition, is the one where we are finding a more competitive energy cost, We are also seeing several manufacturers coming back to the States as a consequence of the ongoing regionalization process as well as, as a consequence of the geopolitical issues.
And also, we are seeing that the steel for our sector and for the demand in our sector still is pending to coming all the contribution of the infrastructure through the IRA program that will keep the demand strong. So clearly, for us, North America is the place to be, and North America is the place to grow.
Through this deal, what we are explaining today is that North American Stainless should pay each shareholder $61 per share. This means a 9% increase with the closing of the trading of Haynes share last Friday. If we go to the last six months, it's a premium of 22% of the average of the last six months. This brings us to an equity value of the deal of USD 798 million.
In addition, with the debt and debt-like adjustments of $172 million will reach the enterprise value we are screening of USD 970 million. In terms of the time line, the Board of Directors of Acerinox and Haynes approved yesterday, the deal, as has been explained by our Chairman, it's expected an extraordinary shareholder meeting to take place in April. And after that, any time in the third quarter, when obtaining all the customary regulatory approvals, Haynes could be fully integrated in Acerinox Group.
For those of you who are not so familiarized with American businesses, we want to explain. Haynes, obviously, is a listed company. This means that you have a lot of public data available in their excellent web page. Haynes is a manufacturer of nickel and cobalt-based alloys. 2/3 of its production is in flat products. They are mostly oriented to hike temperature applications, but also with corrosion resistance applications. And what it for us is extremely relevant is their aerospace presence. They have a strong presence in the aerospace sector and with a high certification level for several players in the aerospace industry. This for us, clearly, has been one of the main virtues for thinking about Haynes.
Niclas shall explain later in more detail, the footprint in commercial and also in production. But when we also analyze the geographical diversification, we see that North America means 58% of that sales. So mostly 60% takes place in North America. So you must understand, and I want just to make a simple definition. But for us, in our strategy, Haynes is a AAA rating investment and AAA because it's alloys, it's aerospace and it's America. This is our focus.
When we go to look at the financials of Haynes, at the end, we understand that the deal is to be closed and the integration is to be done in the third quarter this year. In the third quarter this year is when more or less 30th of September is the fiscal year closure of Haynes. So consequently, we understand that the most accurate and the most relevant figures to analyze are those that the consensus of analysts at Factset consider for Haynes in this year. We are talking about almost $650 million by the consensus analyst with an estimation EBITDA around $96 million, which means an EBITDA margin of 15%.
We have been, as you may understand, analyzing Haynes in deep detail for several months. And after also the due-diligence -- that have been taking place, we are absolutely comfortable with this consensus for putting on place this deal and this transaction today.
Haynes is having 3 production sites. The site with the largest number of employees by far is Kokomo in Indiana since all the forging and all the melting, casting, hot forming, cold forming and finishing is performed. And the majority of the R&D activities are also located in Kokomo, apart from headquarter.
In Arcadia, Louisiana, Haynes' operating a tube-making plant for cold, worked seamless and welded tubes from HPA material [ ex ] - Kokomo and third-party purchased titanium pre-material.
In Mountain Home, North Carolina, they're operating a finishing draw wire and welding consumable plant. Once again, based on their own material from Kokomo and based on stainless steel. Apart from that Haynes in custom in La Porte, Indiana, our operating custom metal processing center. Here, Haynes offers value-add services like slitting, cutting to size, stretch leveling, blanking. For Haynes material, but also for material from other producers, stainless steel producers, for example, like NAS.
Let me now talk about some of the most important characteristics of Haynes. Haynes is a fully integrated, high-performance alloy producer focused on high-end value-added nickel and cobalt-based high-performance alloys. Well positioned, and that's important, as mentioned before, in the aerospace industry. For this, Haynes, is operating unique world-class equipment in Kokomo, including a 4-high reversing hot-rolling mill that has been visited from expert team from NAS and VDM, recently.
As mentioned already by Bernardo, its very dedicated and experienced workforce and Haynes like VDM. And that's very, very important. And Bernardo will comment on that a little later, is very much innovation driven and holds a significant portfolio of alloy patents. Haynes like VDM Metals does not just sell or distribute high-performance alloys. They do application engineering for their customers for new and existing alloys that provide technical sales support for their customers and Haynes is offering value-adding processes in their service centers.
Why Haynes? I think this operation is a consequence of our strategy, the same strategy that we announced with VDM's acquisition. With same strategy that we reinforce in our Capital Market Day, recently. We are growing in high added value products. We will create a platform to consolidate the stainless steel and HPA. And we did it in Europe, and we'll do it in United States now.
This separation has a very strong strategic rationale. So we are filling the pyramid of corrosion and heat-resistant materials that I will explain later, from mild steel that we are now producing in South Africa to commodity and specialty stainless steel and the most sophisticated nickel and cobalt alloys. With this group, we will take a more relevant position, where we're clear leaders in R&D and tailor-made solutions for the industry with sustainable materials. We'll focus in innovation and efficiency and will be connected to our society values. It's a clear cultural fit with a committed and loyal working force.
This exciting operation is a milestone in the history of Acerinox. It will create value for our shareholders, and warrantee our future success. It's fully aligned with our strategy. With this CapEx that we have also announced for the expansion plan, we will develop the platform to integrate Stainless Steel and HPA and obtain synergies of more than $70 million.
On this chart, you can see two -- maybe the 2 most important rationales of this deal, the revenue by region and the revenue by end market. You can see that VDM Metals of course, is the market leader worldwide, is having a very strong presence in Europe. And naturally, Haynes, is having a very strong presence in the North American market. If you combine these 2 entities, you can see that the footprint of HPA alloys of the Acerinox Group will significantly increase by 12% from 16% in North America today to 28% in the future.
On the other side, you see at the bottom column, the aerospace exposure or VDM Metals is fairly low. And as mentioned before, very important, the attractive aerospace market that Haynes is serving with nearly 50% of the shipments and revenues is very strong. Combined, the HPA division of Acerinox in the future will increase their market and their shares in the aerospace sector from 9% up to 20%.
By doing this, and if you look at the very right-hand side, we -- we're creating the most probably most balanced portfolio company regarding customer and industries. Summary is Acerinox will significantly increase its present in North America and in the aerospace market.
The acquisition of Haynes will not be the new status quo. We as Acerinox want to further grow our business, our HPA business and stainlesses business together with Haynes. This is why we are committed to invest more than EUR 200 million in the next four years in the U.S. Most of these investments will be invested in Kokomo. We're looking at a new vacuum induction melting furnace, a new forge and new finishing lines. And we will invest around about EUR 30 million in hot rolling mill components in North American stainless. It will be a combination of replacement and capacity expansion investments. And these investments will be the precondition for the full amount of EUR 71 million synergies that had been identified.
If you would ask me why Acerinox by far will be the best [ earner ] of Haynes, then because I can't think of any other company in the world that is having such a strong selling platform of stainless steel and high-performance alloys in Europe and in the U.S. And because of this, Acerinox can generate such as significant synergies. And by doing that, its adding value to Haynes and existing portfolio companies of the Acerinox group. In this case, NAS and VDM Metals. I can't and I don't want to get into details regarding these synergies. But I can tell you that the team of Haynes and the team of VDM Metals and the stainless steel colleagues of NAS, independently from each other, estimated due to compliance reasons, the possible synergies, and we came to very, very similar numbers.
To just give you a few examples. Haynes is operating, as I said, a finishing drawing operation for welding wire but they don't have any wire rod production facilities. We will supply wire rod via NAS to Haynes to have an integrated wire production line in North America. At the same time, NAS will have a plate rolling done partly in Kokomo, which also generates synergies. And of course, we will improve our European and U.S. sales network because you can imagine that if VDM is able to sell Haynes products in Europe and vice versa, Haynes can sell VDM products in North America that will definitely increase our market shares.
The important message on these synergies is and that had been, I mentioned already, we know how to manage post-merger integration processes. We have shown that by integrating VDM into Acerinox. And this is why the EUR 71 million synergies are reliable and realistic. And that's important, and we will perform these synergies, although it will take some time because of the necessary investments for that.
We kind develop our strategy to be focused on high-performance alloys and higher-value materials if we don't focus on R&D. And in this sense, Haynes, more than a simple industrial company is a research center that combined with VDM and Acerinox will be the most powerful in the history.
We will have 62 dedicated people in HPA for innovation and R&D activities, and we'll have to add another 42 people dedicated in stainless steel. So that means more than 100 people dedicated to R&D, to new developments, new applications, new alloys and of course, to serve and to give the best solutions to our customers.
In this sense, I wanted to explain that Haynes will be incorporated to a think tank that we have internally in Acerinox at a global level between all the companies that is called materials for the day after tomorrow. In this think tank, we are analyzing the megatrends of the industry, trend to anticipate the necessities with new alloys trying to focus the development of new patents and new alloys to the necessities of the future. And of course, will be needed for a sustainable development of the industry and the energy transition.
We'll have together more than 70 patents and more to come, and no other group can provide the variety of solutions that we can offer.
It's an absolute proper fitting of Haynes in Acerinox structure, and one of the relevant areas is that we are sharing strong commitments to ESG. But in addition, several of these KPIs are common and are as ambitious in both of the companies.
There is a strong similarity. You can appreciate in the chart of the public data available from both financial statements in terms of the GHG emissions, also in terms of efficiency in energy Haynes is absolutely favorable further than us being in America at the end. As you know, for us in Europe, the situation always is a bit more difficult, but where they are also absolutely brilliant, and I think very ambitious, and they have demonstrated is in ways recycling. We are very proud of our 90% waste recycling commitment for 2030. But in their case, it may be even higher. So it's a fully alignment in all these areas as well as its fully alignment in terms of culture and especially in the safety performance. So consequently, it's an absolute ideal fit among the cultures of the two companies.
But also talking about ESG, what's relevant is that with the investment that has been already decided, we shall be even improving the actual KPI parameters for Haynes. And at the end, what also is even more important is that we are the ones that produce the sustainable solutions to the low carbon economy that actually day by day is more demanded.
As mentioned before, It's totally aligned with our strategy. For both -- for many of you that follow our presentations with VDM acquisition or in the last Capital Markets Day, we're basing our strategy in four strong pillars. It's added value products that will make us different; strong and diversified product range that will grow by combining processes in the different plants; and the most extensive commercial network with presence in more than 90 countries.
Excellence is a cultural matter for both groups. You know how important is for Acerinox. We have recently released the Beyond Excellence Plan. And hence, that already has its own excellence plan will be incorporated to beyond excellence. Of course, everything have to be done in a sustainable business model, and we produce in a sustainable way with sustainable process, mainly using scrap as our most important raw material.
We are producing long-lasting products, 100% recyclables that will be used and will be necessary for the sustainable industry of the future. As we always say, we cannot have this without a financial strong basement. We maintain our target of a net financial debt of less than 1.2x EBITDA, we will maintain our shareholders' remuneration policy. And of course, we will maintain the dividend. So as promised, our [ committed ] with the market, always looking for the most valuable capital allocation.
In this slide, you can see what we call the pyramid of corrosion and heat resistant materials. Bigger volumes in the basement, smaller volumes in the top, but smaller margins in the basement, bigger margins in the top. With this announcement, we will increase our presence in HPA, in the top of the pyramid, but also with all the R&D capabilities, we will develop something that is in between the stainless steel commodity grades and tailor-made stainless steel grades, we will develop the super stainless steel, super austenitic, super ferritic, super duplex and then we will fulfill the full pyramid, offering the widest range of products in the industry.
With this strategy, we will increase our presence in HPAs and high added value products by 8 percentage points. We'll increase our presence in end users and in projects, and we will increase our profitability between 2.5 and 3.5 percentage points. We'll grow in HPA, as mentioned, we will strengthen our leadership in United States, that is clear in stainless. We will extend our broad portfolio of products. We will increase our presence in aerospace. We will exploit the synergies and will be a leader in technology and R&D. So this is something unique. We will create a new platform in the United States, as we have done, and we are doing in Europe. We'll be market leaders in technology, market leaders in end users, market leaders in high-performance alloys and market leaders in customer service and customer providing the best solution for the industry.
So I think this is very relevant, that we will concentrate in our two major markets in Europe and the United States with the complete platform of materials from stainless steel to high-performance alloys.
Two months ago in our Capital Markets Day in Dusseldorf, we presently -- exactly this slide. The goal of the Capital Markets Day was for you to have a deep understanding of VDM or VDM success as well as to know better the alloys world and its possibilities for the future. What appears obvious now is that we were preparing you for understanding the rationale of the deal that we were close to announce and that we are explaining you today.
What we explained at that time is that our strong balance sheet allows us to prioritize on capital allocation to pursue a strategic, organic and inorganic growth options. Today, we are presenting both. We are covering both growth options through this deal. It's obvious that it's inorganic growth. We are making a strong and relevant acquisition by acquiring Haynes. But in addition, it's followed by further organic growth because what we are also now teaching you and putting on the table is that it shall come additional $200 million investment for improving and reinforcing Haynes. So it's a deal that brings both organic and inorganic growth.
And at that time, we explained what we consider that should be the 5 conditions for this growth and you can realize very simply that exactly all the comments we are making today in these presentations are for covering the 5 conditions, which were strategy, which were synergies, value accretive, cultural fit and diversification.
When we go for giving you some financial parameters in regarding of the significant value creating for shareholders that we are bringing today, we want to reinforce again that this is a transaction that shall be closed and shall be integrated at the third quarter. So consequently, as we explained, we are keeping the consensus as analysts expected for Haynes, which we are comfortable. Through this, the multiple enterprise value EBITDA for the 2024 is going to be around 10.1 which is absolutely in line with specialty steel in the States. And consequently, this is something that we are comfortable with, because this is the multiples at which American specialty steels companies are trading.
And in addition, what we also must put on the table and create further comfort is that, with the precise and realistic synergies that Niclas explained, coming after the investments that also we have been talking about that we are making, we are obtaining this EUR 71 million synergies. And with this, the pro forma reduces the enterprise value to a level of 5.8x, which by far makes this deal absolutely attractive.
What shall take place after this transaction in the closing of the financial statements of Acerinox this year. This is also for us another relevant topic to explain because with this relevant deal, even in the first year, we are not spoiling the KPI that we are establishing for -- through the cycle period. Even though in this year, at the closing of our financial statements, we can keep the 15% ROCE. So the return on capital employed shall be fully aligned with our standard through the cycle. We do not know in which part of the -- or in which month finally and how many months shall be contributing Haynes in this year, but any case, the annualized figure shows that the more or less earnings per share accretion in a 12 months period should be around 11%. So this is also a very extreme pleasant accretion on the earnings per share.
And also what is very relevant is that in the time in which we are making the deal, in the closure or our financial statements in the peak, obviously, of the debt influence of the deal in our financial statements, we understand that we should be in a net debt-to-EBITDA figure of around 1.5. 1.5 debt-to-EBITDA ratio for our industry, no doubt, it's a really low ratio.
In addition, as you know, we have no covenants in all our financing structure linked to profitability. But even though -- if we should have that, by far, the covenant should be substantially above the 1.5. So we are extremely comfortable living with that. We shall finish this year probably with that ratio. And what we have also the clear entity is that probably from '25 to '26, we shall, by far be below the 1.2 that also we established as a reference for us through the cycle.
Thank you, Miguel. So with -- you have seen that with this transaction, we are strengthening already a world leader in stainless adn high-performance alloys. This is, as I mentioned earlier, our strategic step, strategic, not financial and opportunistic. We will reinforce our leadership position in high-performance alloys, as you know, as Niclas has mentioned, Bernardo.
With a strong focus on the U.S. we already were a U.S. company with the majority of our sales in that market. Now we're becoming even more U.S., more American, a great market, as Miguel has said. We -- significant additional future potential that we're going to be part of. And we will also reinforce our position in the aerospace industry, high-growth, high value-added industry.
As mentioned earlier, this is a highly synergistic transaction with already identified estimated synergies of $71 million. As mentioned, we are creating a group that will be a best-in-class solutions provider through addition of extensive R&D capabilities and a very significant patented alloys portfolio. As I hope we have conveyed, we are very excited about this transaction, this industrial use acquisition that perfectly fits with our strategy to deliver significant value to our shareholders.
With that, we are happy to answer any questions you may have. Thank you.
Thank you very much. Thank you very much Carlos and the rest of the speakers for this very detailed presentation. Let's move now to the Q&A session. As in other occasions, please state your name and company, therefore the question.
[Operator Instructions] We have our first question from Tristan Gresser of BNP Paribas.
I'll start with two questions. The first one is on the synergy. I understand the commercial synergies you discussed and the track record you have with VDM. But the synergies are still quite large, especially if we compare to the VDM acquisition. So could you provide a bit more color on the cost synergies, I think 2/3 of the total.
And also on timing, you mentioned you expect to generate most synergies by 2027. Does that mean we should not expect anything in 2025, '26? And also, what is the biggest contributor to the synergies when you look at the $200 million investment plan? I start there.
Let me answer that question. First of all, it is important to understand that you can't compare the acquisition of VDM and the integration of VDM into the Acerinox Group because Acerinox at that stage was not having any HPA division. So the synergies -- because of this -- are significantly higher. I don't want to get too much into details at that stage, but I can tell you for example or I'll give you an example that, of course, we will investigate and we're having a good idea about what's happening or what is the potential that we will, of course, have a look at who can produce which alloy the most cost efficient. And this is by far one of the biggest synergies that we identified.
Yes, the most synergies will be generated without investment until 2027. And of course, we will like in the VDM integration will start immediately after the deal is closed, worth generating synergies on the sales side, on the production side. Therefore, yes, you can expect synergies from 2025 on, that's by far.
One of the biggest contributors, I mentioned already will definitely be the investment into a new vacuum induction melting furnace. The industry in general is short with these capacities. We identified additional potential on products that need the vacuum induction melting facility. This facility will be invested in Kokomo. Of course, it will take time to engineer it, to build it, to ramp it up, and get the necessary certifications. This is why synergies out of investments can only be expected after 2030.
I can add something. With the new investment, of course, we will increase our capacity, our quality, the cost of the products, but also very important that North American Stainless will be able to start production in HPA loan products. Haynes is more based in flat product. And with the support of NAS, that is the strength, the most powerful company in the region. We will be able to develop HPA in the competitive unit of North American Stainless. We'll be able to roll wire out there and also to produce bars that are so important for the aerospace industry. So many synergies will also come from the stainless steel side.
That's helpful. But just a quick follow-up on the synergies. When I look at the investment plan to build a new furnace, new lines, how should I think about this as being to unlocking synergies versus growth? If Haynes decide to do -- to build a new furnace, new lines, it'll bring additional EBITDA as well. So I'm just trying to figure out if out of this growth investment plan, there's also some additional EBITDA tied to it that is not reflected in the synergies number you provide?
See -- understand -- and I really understand your question right. Of course, there is certain EBITDA effects out of the investments like furnace, like new forging facilities. As Bernardo said, this forging facilities is necessary on the long-term -- mid- and long-term basis, increase the long product line. Haynes and VDM both are very much flat focused and the potential that we see in combination with NAS is to get a significant player in long product range. So partly, there will be EBITDA figures coming out of investment. But of course, the biggest part of the synergies that will be unlocked until 2027 are without any significant investments.
And of course, at the time being, we cannot provide too much information, too much detailed information about the investment plan. It's something that we will do it later once we have the control of Haynes. But of course, some of the EBITDA will come from the increase of capacity.
Okay. That's -- I understand. That's clear. And second question on the unions. I believe the majority of employees, notably in Indiana are member of unions. Has there already been some dialogue with the unions regarding the transaction? What has been the initial reaction there? Any color would be appreciated. I'm asking because we've seen recently some pushback from unions on other deals in the metal space in the U.S.
Of course, still, we didn't have the opportunity to speak with the unions. We understand that they will receive the message very well. I think to receive an investor, a new shareholder that will start investing in the area, it's going to be good for the unions. I don't see they are going to face problem with us. This is a unionized company, well, this is not necessary. But I mean, as the unions can't contribute very much the communication with the management and with the strategies. In the case of North American Stainless, and we are in Kentucky, we are -- how the -- it's a nonunionized state, and we are not unionizing in North American Stainless, but that is not going to clear any conflict. I mean something that we'll have to do later.
In any case, as we understand, Haynes management team has already discussed this transaction with union representatives. So they are aware of the transaction. We haven't heard feedback from it yet, but they are aware of it.
Our next question comes from Sandeep Peety of Morgan Stanley.
I have three. I'll take one at a time. So first, does the Haynes acquisition prompt you to entertain a U.S. listing more actively?
Haynes acquisition, as we said, is an industrial strategic transaction. It is not a financial one. We are not looking at anything at the moment, but getting the right synergies, getting the company in place in our world and making sure we deliver the synergies we are promising to you today and making sure we are integrating the company the best what we can as we did with VDM. So we are not discussing or we're not thinking about anything else at the moment. Thank you.
Perfect. And then the second question is on synergies. So the target of USD 71 million, I suggest a very significant uplift related to company's recurring earnings basis. Can you please articulate in greater, how did USD 200 million CapEx plan support this target, i.e., this is a continuation of prior question. How much of that $71 million is linked to $200 million of spending?
I don't want to get too much into details at that stage, but the majority of the synergies is not linked to the $200 million. But of course, in terms of growth and further development of the HPA business in the United States, the minority is, of course, also linked to the $200 million, but the majority is linked -- is not linked to the investments.
And then last question. What's the recurring EBITDA for Haynes today before synergies? Is USD 100 million the right level with synergies coming on top, is that the right way to think about it?
It appears, obviously, we are moving in that direction, but still it's a bit premature. So more or less, this is the synergies definitely that we have allocated. We think it's a precise figure. And we wanted to be precise on that. Sandeep, our style. We always prefer to be overprudent. We were prudent in the VDM deal, and then we, by far have overperformed in terms of the synergies. And what we wanted to give always the -- as always, the explanation to you is that this is not just a pure consultant destination as a percentage of savings or combined growth or whatever. So we have -- and our technicians have made a proper analysis and we consider this as achievable.
Obviously, it's achievable. But in the time being, there should be investments in order to be able to reach that synergy. So it's a clear scenario for growth for Haynes in the future. Making the proper investments, which obviously for Haynes in the financial -- supported by the financial strength of Acerinox Group, Haynes shall be in position to go ahead through the synergies. We are confident that these investments shall be covered and financed with the cash flow generated. And consequently, this is obviously another virtue, but then the rhythm of the timing for the implementation and so on, still spending to determine. So we shall give additional color as much as the pending issues that still have to be defined shall be coming.
But in terms of your question on the EBITDA before synergies on Haynes. The consensus estimate for 2024 is $96 million, but that's a consensus estimate.
Our next question today comes from Tom Zhang of Barclays.
Only two questions left from my side. The first one, just sorry, on the synergies again. I mean with the VDM acquisition, you guys always talked about the initial synergy numbers are sort of and the sort of 1 plus 1 is greater than 2 kind of discussion. Should we read the $71 million as a more sort of accurate target? Or do you think there's upside to that number? That's the first question.
I think that we have the -- we have to be conservative. Still, we haven't answered in detail in this analysis. You have to understand that we cannot share detailed information between the two companies and that will need further investigation, and we are conservative in our numbers. Normally in this kind of merger, these kind of operations, the most or the biggest synergies are known or coming later, especially from the commercial side for the top line. I think we can wait until we can find some more synergies or go to retail but today, we think that $71 million is reasonable and it's something that we can consider conservative.
Got it. And then just the other question, I mean, how do you think about the political risk of this kind of deal? Because I guess, similar to the union question before, where you've seen obviously pushback politically to European or European-owned companies taking stake of U.S. companies, particularly for an aerospace-focused and potentially defense-focused company. Any sort of thoughts that you have on that side would be appreciated.
This is a very different operation that the large Nippon Steel, U.S. Steel. We are a U.S. company. We -- our main asset is in the U.S., and that is the company that is buying -- at least acquiring Haynes. So it's a U.S. company buying another U.S. company, so we don't see why it should be a political issue.
On top of it, this U.S. company is going to reinvest additional investments to generate additional synergies, the ones we discussed. So it will be better and good for Kokomo, for Indiana and for the U.S. in general.
In terms of the defense sector, there is a small part of Haynes that dedicate itself to defense, but it's only a small part. And according to our discussions, we understand that none of their materials, products in defense are unique. They are not one of the patents. So I don't think -- we don't think it should be a problem in any case. This is going to be discussed with our regulators and CFIUS, and we'll wait for their approval when the time comes. But we don't believe it's going to be the same. We don't think it's the same situation as other foreigners coming into the U.S. with no U.S. presence. We are an American company already.
We're an American company and with a very good reputation in the United States. We are employing more than 1,600 people in North America Stainless. We have invested in North America Stainless, more than $2.5 billion since the beginning of the plant. And I think that our reputation in Kentucky and in the United States will be very helpful for this.
And in addition to that, the exposure to defense should be limited.
Our next question comes from Bastian Synagowitz of Deutsche Bank.
I've got three questions left, please. The first one is actually only $200 million CapEx number which you disclosed in relation to the transaction. Does that mean that the total CapEx number for Haynes will be at $50 million per annum run rate? And maybe also, can you give us a bit of an early gauge where the overall CapEx for the new Acerinox Group and the new structure will settle in 2024 and '25? That is my first question.
Thank you, Bastian. Well, basically, more or less the run rate could be considered. As we have already stated, we cannot give too much color actually on this. Keep in mind that this is the CapEx that has been designed by ourselves. Still we have not asked to the suppliers for the equipments, with all the indications and precision and so on. So consequently, this is something to be determined. We understand that this run rate that you are mentioned should be adequate, but we cannot give further color on that. This is in addition to the CapEx program that we have in the group. And at the end, this is in addition with the CapEx that already Haynes is contemplating to keep and you can follow their -- there are statements on that. This is in addition. So this is as a consequence of this deal, as a consequence of the areas of growth. And as a consequence of the support we are providing Haynes by entering in the Acerinox Group.
But we keep our CapEx plan -- actually -- actual base -- you know that in North American Stainless, we are also expanding. And as you may remember, we clearly indicated in the Capital Markets Day that probably the annual estimation of our CapEx should be $200 million. This obviously is in addition. So the business as usual for Acerinox is $200 million, and this CapEx has come in addition.
Thanks, Miguel, for clarifying. But so that means that the overall CapEx run rate actually will be more like $250 million roundabout and actually not go up to like $300 million or so?
Now we have no further plans. We are respecting and understanding the CapExs that Haynes is actually putting in place and contemplating. And in addition, we have find the areas for growth and the areas for additional volume growth, which is relevant in the States, especially in the sectors where Haynes is strong, so this is in addition.
So Bastian, remember that the maturity of our investments in this sector, if you are the one being furnace, the time of construction will be minimum two years. I mean, so we will start investing with the first payment to send the other. Then we will be busy with the civil works to install later this equipment, then we receive the equipment. And we have another payment. And then at the end, after testing everything, we will do the last payment. So that process can take easily [ 4 ] years. So that will not be an extreme necessity for forecast for Acerinox Group.
Great. Then just to stay, on the financial context and the balance sheet implications. And can you please let us know how you aim to get back to 1.2x financial net debt by next year already? What are the building blocks to get there? Like are there large amounts of working capital, synergies as well maybe from that transaction? And also, do you rule out any equity measures to get there?
Well, it's just more or less following our business projection. As you know, we are presenting four weeks from now. We are presenting our full year statements. You shall see more or less how it has been, the cash generation of the group in the fourth quarter and for the full year, which is something that, obviously, we will discuss with you in the Capital Markets Day.
We are a consistent cash generator at the group. The basis for Haynes is also that it shall be a cash contributor and consequently, the cash generated by the group in the business, combined with the EBITDA contribution, which at the end also, as you realize, among our peers, we are the one with the strongest EBITDA generation, are the ones that may neutralize the fact that in this year, we'll increase the debt for financing this deal. It's going to be a cash deal, as has been precise.
Our strategy for years has been being very strong and keeping a strong cash position in the States. This has been a very successful financial strategy. And this allows us to make a very simple day in the terms of making cash acquisition in the States. But the wheel is still is moving. So consequently, we are comfortable that with this peak, in this year, which at the end is absolutely affordable peak, it shall be reduced and we shall be at the level of 1.2x probably for less than 20 months from now or 1.5 years. But we understand that in 4 or 5 -- sorry, 4 or 5 years, we could be in the actual levels. So we are a strong cash generator, and we shall keep doing it and also Haynes is proper strong cash generation and shall even go further now in the Acerinox Group.
Great. My last question is actually a slightly higher-level question, if I may. And let's say, if we go back to the VDM transaction, it's been very successful. I think you massively overachieved on the synergies. I think your valuation multiplier has not really been reflecting that. Obviously by even more exposure to the U.S. and to the specialty markets and you're paying a multiplier, which is considerably above your own valuation and probably much closer to the valuation where you should be trading on.
I know this may be very early days, but with your U.S. and Specialties earnings stream getting to probably 70%, 80%, if not even higher and even with much more critical mass, is the U.S. listing something which you would consider further down the road, if it would be required to really unlock that valuation discount?
Thank you, Bastian. We already mentioned the issue of the U.S. listing. This is a transaction -- industrial transaction. And right now, we are focusing on getting the best out of the business, getting the best out of Haynes to be incorporated into Acerinox Group and delivering together a great financial performance. This is what we're focusing right now.
It is true that we're becoming a more American company, but that is based on our decisions to go into the market, a very attractive market that we continue to believe in. And we believe it's going to be very good for the future. We have not discussed the U.S. listing right now. We are focusing on the industrial side. Thank you.
Our next question comes from Patrick Mann of Bank of America.
Most of the questions have been asked. I just wanted to ask, obviously, with the timeline you've given, you're not foreseeing any significant regulatory hurdles to overcome. I just wanted to ask, could you talk a little bit about the end markets that you'll be operating in and what your market share will be? Is there anything -- is there -- are there any end markets where you might be face some competition issues?
No we cannot -- due to compliance reasons, we cannot speak about market share. We would not expect any problem with competition authorities. I think it will be very -- the group, the new group will be very far from the 30% that we start to worry to the authorities. And we don't foresee any problem, but even -- and we have to submit it to antitrust and also to CFIUS authorities.
Niclas, you want to add something in the end users?
No, I don't see any problems there, especially not regarding specific market shares in the end industries being far away. As I explained to you, the deal is very complementary since the exposure to aerospace or VDM is very low. So therefore, we don't see any problems at the end user markets at that stage.
Our next question comes from Alberto Espelosin of JB Capital.
Most of them have already been asked. I have three, if I may. First one is on the strategy with VDM assets in the U.S. Are you going to operate two different HPA companies in the U.S.? Or is Haynes going to be at Acerinox platform in the U.S. and VDM will focus in Europe? Because I see that its group is exposed to different segments. So I assume both companies are different, but they are probably complementary products range. So if you could please elaborate on your strategies here, it would be great.
We did not define this yet. We will have a very careful look of the closing of the deal, and then we will decide exactly how we're going to run this business in the U.S.
The states, like 6 facilities. We have North American Stainless. We have New Jersey for VDM and Reno for VDM as well and the three locations that Niclas explained before in this. So we can combine all our businesses, and we will see how can we optimize the future functioning. I think that VDM, it has a small presence in United States with a very strong and loyal base of customers. So that will also give us or strengthen our position in the United States.
Yes, understood. My second question is how sure are you that Haynes shareholder would accept the $61 per share price? And also, it did like @ in acquisition. So if 51% of shareholders accept the bid, will they still go through?
We are not certain. We don't have a crystal ball, as you can imagine, but we are confident that we are offering a very good value, very good price for Haynes. We have discussed this with the management team and the Board of Haynes and they are confident that this is a good value for the shareholders. So we just believe that our valuation will be the right one for them.
And we believe, according to what we hear that the main shareholders should be going for their approval transaction because, again, it's a very good transaction for the shareholders and for the stakeholders, both in Indiana and other locations. We are reinvesting in their company. We're reinvesting in Indiana, and the shareholders should be, we believe, happy with the cash offer here.
Okay. Understood. And my last question. It seems that you are fully focused on HPA and growing on the stainless steel in the U.S. I know today is time for the acquisition of Haynes, but just one question on your strategy. Should this acquisition accelerate the [ buyers exit]. And does it close the doors of the share buyback due to balance sheet, even if you get more visibility on stainless steel?
I think in our strategy, as we mentioned recently, we are clearly focused on our biggest markets, that is Europe and it is United States. Peru, as I mentioned before, is not a problem for us because we are not losing money there. But very clearly, the geostrategic situations and the new trends in the world are changing. The world is becoming more regional. And we want to concentrate our efforts in Europe and United States that are our natural markets, of course, not forgetting that we have the strongest presence in Africa.
So we'll continue with our strategy, focusing on HPA, focusing on the United States, but we don't forget what we have in the rest of the group that is giving us the strength that we have as the most global player.
For the buybacks question, what we always said is that we will have a -- we published our remuneration policy, and it is based on a sustainable, not EUR 0.6 per share, but maintaining the total remuneration and when we have a buyback, then we increased the per share value. But we always said that we will continue with our industrial plants, that we are an industrial company, and the strategy is to go ahead with the industrial plants. And when we have an excess of cash or a good opportunity, we can enter in another buyback program. But this is not something that -- what we are thinking today.
As mentioned earlier by Miguel, this transaction does not change our remuneration policy. So as Bernardo said, there's an opportunity for share buyback, and we still believe that our share price is quite low, that's a good opportunity to invest as well. But we have not changed our remuneration policy and will be year-on-year, we'll see how best way to remunerate shareholders. But again, this transaction doesn't affect that.
Our next question comes from Iñigo Egusquiza of Kepler.
Iñigo Egusquiza from Kepler Cheuvreux. Most of them have been already answered, but I have three follow-up questions or new questions. The first one is, Miguel, if you can please elaborate a bit on the net debt of Haynes International because you are mentioning [ $172 million ] to get to the enterprise value that you put on your presentation. And according to Bloomberg and the numbers I have seen published by Haynes, the net debt of this company is slightly lower than that. I don't know if you can explain the difference between these two numbers. This is the first question.
Yes, sure, Iñigo. We -- what we were contemplating for reaching the enterprise value was not only the pure financial debt, but also the debt-like items which include other areas, post retirement and so on. So all the issues that at the end, have the relevance on the enterprise value, not only the pure financial debt. So with all of this is where we reached to [ $172 million. ]
Okay. A follow-up, Miguel on the CapEx. You mentioned the EUR 200 million for Acerinox before the -- this new acquisition. This EUR 200 million include the expansion plans in both U.S. and VDM, that's right?
What I said was that the -- our standard business as usual now is in the range of EUR 200 million. In addition, as you know, it was designed to have further investment program in VDM, which is something in addition to that. And also in addition, we are actually respecting and keeping, obviously, the CapEx plan coming from Haynes, keeping in mind that obviously, after the deal, a lot of issues should be precise or harmonized. So but in general, we could annualize the standard program of Haynes at the range of [ 25 to 30 ].
And in addition, we are having for the next, more or less 4 years, starting whenever the transaction is closed, the additional program of this EUR 200 million. So this EUR 200 million is our business as usual. And in addition, we are in a special investment phase in VDM that has been explained as well as the ones that now Haynes provides.
Okay. Very clear. And just a final question to Carlos, if I may. It's a follow-up on Alberto's question on the position from Haynes shareholders and the potential acceptance or not. I understood your answer, Carlos, but the question is whether you have a minimum capital to go ahead with the acquisition in case there is a proportion of shareholders have decided not to accept or you will also only go with the acquisition, if you acquire 100% of the company.
This is -- thank you, Iñigo. This is a special or different strategic merger regulation in the U.S. than we have in Europe or in Spain. In there, we can have a 50.1% votes -- votes from shareholders. And with that, we get to 100% of votes. So we are going for the 50-plus one percent favorable votes from shareholders to get to 100%. So we are not going to get a stake on Haynes. We're going to get the full Haynes, able to realize potential synergies and unlock the value that we believe the company has, together with us. I don't know if I answered the question, Iñigo?
Yes.
The next question comes from Maxime Kogge of ODDO BHF.
Most of my questions have been answered. Maybe one on pollution. Actually, the company Haynes had been accused previously of pollution. I mean, emitting harmful gases. Do you think that the situation is now under control? Are you completely reassured in that respect or -- and if not, what do you plan to do in that area?
All the industrial companies can have a problem, that is something that is not unusual. It's not desirable, but it's not unusual. And Haynes has a very clear environmental policy. It's very focused on ESG, especially in this part that is environmental. And I fully believe that this is a past problem. And of course, we will put all our efforts to -- not to happen again, but nobody is free in this business, to have a problem from time to time because of the failures in equipments or whatever. But it is not a bad reputed company, it is the opposite.
The next question comes from Krishan Agarwal of Citi.
I have only one remaining, as most of them have already been answered. Are there any kind of break fees associated with transactions in any given circumstances, if the transaction is not able to go through?
Regarding the question, correct -- are you asking about the break fees on the transaction?
Yes. For break...
Well, there are standard breakup fees, in case a transaction doesn't go ahead. In case Haynes management decides not to go ahead with the transaction, which they have already agreed to. And this standard breakup fee, which, as you know, in the U.S., between 3% and 4% is quite standard. So it's thereabouts.
Sorry, 4%? Okay.
The 4% is quite standard there.
And our final question comes from Robert Jackson of Santander.
Just a general question. What's -- what would you say would be the main challenges that you think you face with the integration ever coming 6 to 12 months? And secondly, what was the things most liked about Haynes?
I think in the post-merger integration process is always to -- the biggest challenge to get the management and the team aligned. I think it's going to be -- one of the big challenges will be to create a post-merger integration process on high-level. It very much depends. Of course, you're always having cultural differences in different countries and different companies.
But this is something that we experience as a very positive impact with the VDM integration. So therefore, I'm quite positive that with the social competence and the common knowledge about this industry that we more see the chances than the risks, and this is going to make this process as successful as the integration of VDM.
Robert, I think that, first of all, that we have the very recent experience in VDM. And it's -- I think it's a successful story. Also, you know that from all our history, we have been very proud to say that we are a very lean company. So we don't have an excess of personnel in any area. [ And third ], I think that we have met the management team of Haynes. We are very happy with the reception.
I think that we are very much aligned. Of course, we'll have cultural issues, but we are very much aligned. I think that they are happy to have Acerinox as a shareholder. I think that this is, as Niclas mentioned, is the best shareholder that they can have. It is a shareholder that is committed with the company, that is committed with the growth of the company. So this is very important.
And of course, we are welcoming all the management and all the people working for Haynes as we become part of the Acerinox family. I think that the -- they will be very well received here. They will be welcomed, and we are happy to have all the efforts and all the skills that Haynes has, and all the tradition and reputation in specialty metals making.
As Bernardo said, we are very excited about the Haynes. We are very excited of what they have, about the products, the end markets, where they're producing in those three plants. But what I would say, you asked about what is -- what we like the most? As Bernardo said, the management team.
We have met them a few times. We like them. We -- its not that we just like the CEO or the Chairman with whom we have discussed many, many times over the last few weeks, but also a second level management team, they are extremely professional and we hope and count that they will continue with us to deliver good value for our shareholders. So the management team for us is a key. And as Bernardo said, the cultural fit is as important, and we believe we have that cultural fit with them.
Thank you. Thank you very much. That conclude today's conference call. Thank you for joining us today. Thank you for all the presenters. As you can see, we are very excited with this announcement. We will continue to exchange opinions with you in the coming weeks. And we hope to see you in the next set of results that will take place, the 1st of March. We will release on the 29th of February and have the presentation on the 1st first of March. Thank you very much.
