METALL ZUG GROUP - Investment Strategy

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Investment Strategy

At the beginning of January 2008, the METALL ZUG GROUP acquired the Schleuniger Group, which now forms an independent business unit. With this acquisition, METALL ZUG AG has successfully implemented its investment strategy which was introduced in 2006.

The METALL ZUG GROUP is a conglomerate of industrial companies and service providers. For a considerable time, METALL ZUG AG’s results have been exceedingly stable. METALL ZUG AG has developed a long-term investment strategy over the last few years to ensure that financial means are invested economically. At the annual media conference in 2006, this investment strategy was presented to METALL ZUG’s shareholders and to the public.

Long-term strategic investments
The 2006/2007 investment strategy aims at investing in companies preferably from the industrial sector and the real estate industry. METALL ZUG AG generally targets majority shareholdings or complete acquisitions in order to actively and efficiently support acquired businesses in coping with current strategic challenges, and adopts a long-term investment strategy while focusing on sustained business development. Internationally active businesses which are headquartered in Switzerland or in a neighboring country and which hold a good to leading market position in the respective sector or market niche are potential acquisition candidates. Likewise, the businesses considered for acquisition should possess sustained earning power, have a qualified management team and share the values of the METALL ZUG GROUP.

Acquisition of the Schleuniger Group as a strategic diversification into a related industry segment
METALL ZUG AG has set up an Investment Committee in 2006 to ensure optimal implementation of the investment strategy. This committee evaluated potential acquisition candidates and made recommendations to the Board of Directors. This structured approach came to fruition with the acquisition of the Schleuniger Group, a manufacturer of wire processing machines, in a deal which was closed at the beginning of January 2008. The internationally operating Schleuniger Group, headquartered in Thun, constitutes a new business unit within the METALL ZUG GROUP, and in 2007 its gross sales amounted to approximately CHF 100 million with an EBIT margin of over 10%. At CHF 136 million for 100% of the shares, the acquisition price was in the conventional scope. The METALL ZUG GROUP funded the acquisition with its own resources. 90% of the shares were acquired immediately, the remaining 10% will be taken over by the end of 2010 at the latest. The Schleuniger Group optimally diversifies the portfolio of the METALL ZUG GROUP. On the one hand, Schleuniger’s global orientation reduces dependence on the Swiss market. On the other hand, the wire processing industry is subject to different cycles than the construction industry. Schleuniger is also autonomous and has the critical size that allows successful further development under the umbrella of the METALL ZUG GROUP. The acquisition of the Schleuniger Group is thus in perfect harmony with the long-term investment strategy of the METALL ZUG GROUP.

Increased focus on further development of business units
Now with four business units, the METALL ZUG GROUP has a balanced and well-rounded portfolio that is in line with financial capacity. As the Investment Committee had successfully completed its task, it was dissolved in December 2007. During the past few years, in parallel to the search for an additional industrial mainstay, the METALL ZUG GROUP has also established the basis for further business development within the existing business units. Thus, any further acquisitions will directly be initiated by the four business units themselves which will also bear the resulting responsibility. METALL ZUG AG is planning to focus more intensively on its function as a strategic management holding company.