Rieter (RIEN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates growth strategy, creating a global leader in both natural and manmade fibers and diversifying end markets.

• Unlocks new growth opportunities in the manmade fiber sector, expected to outpace natural fibers in market growth.

• Barmag's complementary technologies and customer bases diversify the product and application range, strengthening presence in key regions.

• Both companies share similar values and cultures, supporting smooth integration.

• Access to Barmag's expertise enhances innovation in digitization and product sustainability.

Financial terms and conditions

• All-cash equity purchase price of CHF 713 million, with an earn-out of up to CHF 100 million based on overachievement of the business plan by 2028.

• Enterprise value of CHF 850 million, representing an EV/EBITDA multiple of 6.3 (5.4 including run-rate synergies).

• Financing secured via bridge loan, CHF 477 million capital increase (rights issue and private placement), and syndicated debt.

• Major shareholders fully back the capital increase, with PCS Holding AG and Martin Haefner committed to participate.

• Post-transaction leverage expected at around 3x EBITDA, with rapid deleveraging planned over three years.

Synergies and expected cost savings

• Minimum CHF 20 million run-rate cost synergies expected, mainly from procurement and operational efficiencies.

• Synergies considered conservative given the combined procurement volume exceeding CHF 1 billion.

• Additional savings anticipated from transition of services currently provided by Oerlikon.

• Combination expected to enhance financial performance and margin resilience.

• No significant restructuring planned due to soft integration approach.