Winterthur Technologie AG

euro adhoc: Winterthur Technologie AG
Mergers - Acquisitions - Takeovers / Winterthur Technologie AG establishes a leading position in the diamond tool segment through acquisition of the Wendt Group

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Key acquisition in core business - increased capability in high-end abrasive technology - sales and earnings doubled

Winterthur Technologie AG is buying a 100% equity holding in Wendt Holding GmbH from 3i Germany, strengthening its market position in the superhard abrasive materials diamond and CBN. This move doubles revenues on comparable profitability. Integration of the new technologies, in particular specialized tool-grinding machinery, will open up important new markets. The two companies are a good match in terms of their niche strategies, range of technologies and geographical spread. Synergies will be generated through a significantly enhanced presence in international markets and a stronger product portfolio.

Winterthur Technologie Group (WTG), domiciled in Zug, has completed its acquisition of the entire equity in the Wendt Group, which has its headquarters in Meerbusch (Düsseldorf). This takeover creates one of the world´s leading suppliers of complex grinding technology. Combined sales of the two groups in 2006 would have amounted to EUR 202 million (CHF 318 million). The WTG headcount rises from 879 to 1,500. The acquisition will enable WTG to offer, from a single source, a full range of abrasive technologies in the microprecision field. In the high-precision technology sector, with the tightest dimensional specifications, WTG will take a leading position in certain market segments, notably superhard materials. The range of processing technologies offered by the Group will be extended by new, superhard and brittle materials, such as glass, as well as tool-grinding machines.

WTG is a holding company under Swiss law which is listed on the SWX Swiss Exchange, Zurich, with production sites in Switzerland, Austria and Sweden. The Wendt Group produces high-precision, specialized tools coated with diamond and cubic boron nitride (CBN) as well as tool-grinding machinery in Germany, Switzerland, Belgium, the USA and Russia; it also holds a 40-percent stake in the publicly listed Wendt (India) Limited, India. The two groups have no overlapping activities. WENDT is a quality brand that will complement Winterthur Technologie Group`s portfolio of premium brands.

No approvals from antitrust authorities were required. The takeover of all Wendt shares, with a total value of EUR 99 million (approx. CHF 164 million), as well as the company's net financial debts of EUR 32 million (approx. CHF 53 million) and provisions amounting to EUR 22 million (approx. CHF 36 million), will be funded largely by a capital increase in the region of CHF 100 million, raised through a registered share issue as well as bank credits. The Board of Directors is to ask the forthcoming Extraordinary General Meeting of shareholders to approve a capital increase, primarily for the purpose of financing the acquisition. Option rights for existing shareholders are guaranteed. The capital increase is to take place before the end of the year. The Group has appointed Credit Suisse as lead manager for the capital increase.

Dr. Edgar Rappold, CEO, founder of WTG and its largest shareholder, explains: "This major step represents a realization of the planned strategic orientation by developing the diamond and CBN tools segment. As a result, sales of superhard abrasive materials will be on a par with those of conventional grinding wheels. We are now in a position to offer customers complete systems: from technology consulting, through grinding wheels to high-precision dressing tools. We will also have new technologies at our disposal - particularly specialized tool-grinding machinery for the manufacture of superhard tools using tungsten carbide, polycrystalline diamond and CBN - as well as the related high-performance tools."

Norbert Lamers, CEO of the Wendt Group, reiterated the enthusiasm of the company's management and workforce at joining forces with the technology leader in precision grinding: "It is not just the products and corporate philosophy, but also the locations of the two groups that fit well in every respect - and that will make us an even more attractive partner for our customers."

The profitability of the Wendt Group at EBIT level (earnings before interest and tax) is in a similar percentile range to that of WTG. The 2007 guidance of WTG regarding sales growth and EBITDA margin remain unchanged.

A news conference is scheduled for 27 June 2007 at 10am CET at the Marriott Hotel in Zurich. An analyst call is scheduled for 27 June 2007 at 3pm CET. Access numbers (10 minutes prior to the call):

Participants      from Europe:        +41 91 610 5600
            from USA:          +1(1)866 291 4166
            from UK:            +44 207 107 0611


Winterthur Technology Group (WTG), a leading European provider of complex abrasive technology, is headquartered in Zug and has operations in Switzerland, Austria and Sweden. Winterthur Technology Ltd is a holding company under Swiss law which is listed on the SWX Swiss Exchange. It has just over 600 employees and in 2006 achieved sales of approximately EUR 86 million. Working closely with clients, the company develops and produces complex high-margin, high-tech abrasive technology consumables, primarily bonded abrasive tools used in the automotive, turbine and steel industries. Production is located in Austria (Villach) and Sweden (Västervik). In Switzerland (Winterthur), there is a finishing plant and a logistics centre. The Group´s main brands are Winterthur, Rappold and SlipNaxos. WTG´s products - vitrified grinding wheels, resin bonded grinding wheels, cut-off wheels and diamond and CBN grinding wheels - are sold in all the relevant European markets, as well as in North and South America and Asia.

Disclaimer This press release does not constitute an offer or invitation to subscribe for or purchase any securities. This press release does not constitute a prospectus within the meaning of Article 652a of the Swiss Code of Obligations or within the meaning of the listing rules of SWX Swiss Exchange. It is not being issued in countries where the public dissemination of the information contained herein may be restricted or prohibited by law. In particular, this press release is not being issued in the United States of America and should not be distributed to United States persons or to publications with a general circulation in the United States. Any non-compliance with such restrictions may result in an infringement of United States securities laws. Securities of Winterthur Technologie AG, Zug, have not been registered under the United States securities laws and may not be offered, sold or delivered within the United States or to U.S. persons absent registration under or an applicable exemption from the registration requirements of the United States securities laws.

This press release contains forward-looking statements based on the currently held beliefs and assumptions of the management of Winterthur Technologie AG, Zug. Actual results may differ materially from such forward-looking statements which will not be updated.

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ots Originaltext: Winterthur Technologie AG
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Further inquiry note:
Dr. Edgar Rappold, Delegate and CEO
Markus Brütsch, CFO
Phone +41 52 234 41 41
Fax +41 52 234 41 06

Branche: Technology
ISIN:      CH0021892606
WKN:        2189260
Börsen:  SWX Swiss Exchange / official market

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