Rieter (RIEN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates growth strategy, creating a global leader in both natural and man-made fibers, diversifying end markets, and reducing exposure to apparel.

• Entry into the higher-growth man-made fiber market, leveraging Barmag's technology leadership and expanding Rieter's offering and market reach.

• Barmag's complementary technologies and end-markets diversify the portfolio and strengthen presence in key regions, especially Asia-Pacific.

• Strategic fit is reinforced by strong cultural alignment and shared values between the companies.

• Diversification across industrial applications outside apparel enhances resilience and growth prospects.

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 or financial results by 2028.

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

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

• Major shareholders, including PCS Holding AG and Martin Haefner, fully back the capital increase and will retain significant stakes post-transaction.

• 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.

• Additional savings anticipated from integrating transitional services and leveraging shared resources.

• Synergies are considered conservative, with further potential identified post-closing.

• Combined entity expected to nearly double in scale, with improved margins and cash generation.

• No immediate restructuring planned; soft integration approach to preserve operational strengths.