Daetwyler to sell cable unit; focus on seals, medical packaging

ERJ staff report (DS)

Altdorf, Switzerland -- Datwyler Group is streamlining its Group structure and will now focus on high-growth, high-margin businesses. The company is selling its troubled cable unit and will now focus on its sealing activities and pharmaceutical packaging. The company is also planning to issue straight bond of approx. CHF 100 million to 150 million (euro 83 million - 125 million) to fund additional growth.

The company's existing Sealing Technologies and Pharma Packaging Divisions will be combined to form the new Sealing Solutions Division, while the current Cabling Solutions Division will be sold to Pema Holding AG (majority shareholder of Dätwyler Holding Inc.).

In 2011, the Cables division generated net revenue of CHF 240.9 million and operating profit (EBIT) of CHF 4.6 million (1.9 percent EBIT margin). Daetwyler said the unit has only limited potential to further increase value within the Datwyler Group. For this reason, the entire division will be sold to Pema Holding AG for CHF 95 million. The operational management and Datwyler trade name will also remain unchanged and ensure continuity. Agreements to use the trademarks and for other management services have been signed with Dätwyler Holding Inc. Hanspeter Fässler will serve as Chairman of the new Board of Dätwyler Cabling Solutions AG. He is also a Director of Pema Holding AG and Dätwyler Holding Inc. During a transition phase, the Datwyler Group's CEO and CFO, Paul Hälg and Reto Welte, will also serve as Directors of Dätwyler Cabling Solutions AG.

The new Sealing Solutions Division operates its own high-performance manufacturing facilities located in the three principal economic regions: Asia, Nafta and Europe. One example is the new pharmaceutical components plant in India, which has recently been getting mass production up and running. Dätwyler Holding Inc. has also completed the acquisition of Anhui Zhongding Sealtech Inc. (Zhongding), with one plant in China, and Hankook Sealtech Inc. (Hankook), with two plants in South Korea and a 40 percent joint venture interest in an Indian plant

The new Datwyler Sealing Solutions Division employs some 5,000 people at 17 facilities of its own and will generate annual revenue of more than CHF 600 million from 2013 onwards. An EBIT margin range of between 11 percent and 14 percent is targeted. These figures include the Zhongding and Hankook companies acquired in China and Korea on 12 October 2012.

The new Datwyler Sealing Solutions Division will be headed by Dirk Lambrecht, the current CEO of the Sealing Technologies Division. Guido Wallraff, the current CEO of the Pharma Packaging Division, will be responsible for Global Business & Customer Relations in the new division. He will therefore leave the Executive Management of publicly listed Dätwyler Holding Inc. with immediate effect. Today, Datwyler supplies rubber sealing solutions to the global pharmaceutical, diagnostics, automotive, civil engineering and portioned food (Nespresso) markets.

Datwyler will also continue to pursue its growth strategy in the Technical Components Division as before.

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Press release from Daetwyler