Rieter To Acquire Oerlikon’s Barmag Business, To Become Market Leader In Natural And Manmade Fibers Machinery Business

Mergers & Acquisition

Rieter To Acquire Oerlikon’s Barmag Business, To Become Market Leader In Natural And Manmade Fibers Machinery Business

HIGHLIGHTS:

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- Barmag is a globally known leader for manmade fibers equipment with sales of approximately CHF 734 million in FY 2024

- With the acquisition, Rieter strengthens and expands its technology position in natural and man-made fiber machinery business.

- The acquisition will be through upfront equity purchase of CHF 713 million. Financing is fully secured, and balance sheet stability shall be maintained

- PCS Holding AG (Peter Spuhler) remains the largest shareholder and played a strategically important role in this acquisition

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Rieter has signed a definitive agreement to acquire Barmag from OC Oerlikon for an upfront equity purchase price of CHF 713 million. The acquisition will create a globally leading player in natural and manmade fibers and is highly complementary to Rieter’s short-staple fiber business.

Barmag is a leading supplier of filament spinning systems for manufacturing manmade fibers, texturing machines, BCF systems, staple fiber spinning and nonwovens solutions and – as an engineering services provider – offers solutions along the textile value chain. In the financial year 2024, the company generated sales of CHF 734 million with around 2600 employees.

Barmag comprises of the established product brands Oerlikon Barmag, Oerlikon Neumag and Oerlikon Nonwoven. The main markets for the Barmag product portfolio are China, India, Türkiye and the United States of America. The innovative and technologically advanced products are developed in Remscheid and Neumünster (Germany) as well as Suzhou and Wuxi (China).

As fiber consumption is projected to rise, most of the growth is expected to come from manmade fibers. The increase of natural fibers such as cotton and linen is limited due to natural boundaries. Manmade fibers will help to meet expanding demand for clothing, technical and home textiles. The strategic acquisition of Barmag will transform Rieter into a leading supplier for converting natural and manmade fibers into yarn.

The transaction is fully in-line with Rieter’s strategy and follows previous acquisitions, where Rieter complemented its portfolio in short-staple fiber machinery and expanded its footprint in components and machinery for manmade fiber production. The combined platform allows to leverage the recovery of global filament and short staple fiber spinning markets and to reduce cyclicality due to diversification of end-markets. The acquisition will further enhance Rieter’s position in the important Asia-Pacific region and provide access to Barmag’s filament expertise, which will help to further scale Rieter’s own capabilities and improve digitization solutions and product sustainability.

Thomas Oetterli, CEO of Rieter: “We are very proud to welcome Oerlikon Barmag, Oerlikon Neumag and Oerlikon Nonwoven to Rieter. We are convinced that this combination will form a market leader in the textile industry which will create value for our shareholders, customers and employees.”

Georg Stausberg, CEO of Barmag: “With this solution, we will have the best new ownership possible, as we will benefit from each other as textile companies from market understanding, technology expertise and complementary offering for our global customer base.”

The enterprise value of CHF 850 million represents a through-the-cycle EV/EBITDA of 6.3x (excluding synergies). If certain financial criteria are achieved by 2028, an earn-out component will be paid to the seller. The acquisition is expected to enhance Rieter’s financial performance given Barmag’s structurally higher through-the-cycle profitability and margin resilience in market downturn.

The acquisition financing is secured by a bridge loan facility. Refinancing of the bridge facility will happen through a fully underwritten CHF 400 million rights issue with tradable subscription rights, a CHF 77 million non-pre-emptive private placement which is fully committed and subscribed by Rieter’s two largest shareholders and a bank financing.

Rieter’s largest shareholder, Peter Spuhler (33% shareholding) is supportive of the transaction and committed to participating in the rights-issue pro-rata by exercising its subscription rights as well as investing additional capital through the non-pre-emptive capital raise. After the capital increase, PCS Holding AG is expected to retain a shareholding of 33%.

Additionally, Rieter’s second-largest shareholder, Martin Haefner (10%), also supports the transaction and has committed to participating pro-rata in the rights-issue by exercising its subscription rights and investing additional capital through the non-pre-emptive capital raise.

Rieter remains committed to strong balance sheet stability and expects to deliver quickly from a pro forma combined leverage per end of 2024 of 3x post the CHF 477 million equity capital increase driven by cash generation of the combined entity. An extraordinary General Meeting (“EGM”) is expected to be convened in the third or fourth quarter of 2025 to obtain shareholder approval for the capital increase in connection with the rights issue and the private placement. The definite terms of the rights issue are expected to be determined and communicated on or around the date of the EGM. The acquisition of Barmag is subject to customary closing conditions, including regulatory approvals. Rieter is confident it will obtain all regulatory clearances. The closing of the acquisition is targeted for Q4 2025.

For this acquisition, Alantra is acting as exclusive financial advisor and Lenz & Staehelin as legal advisor to Rieter. UBS underwrites the bridge loan facility and acts as Sole Global Coordinator, Sole Bookrunner and Sole Manager of the capital increase.

We are very proud to welcome Oerlikon Barmag, Oerlikon Neumag and Oerlikon Nonwoven to Rieter. We are convinced that this combination will form a market leader in the textile industry which will create value for our shareholders, customers and employees.”- Thomas Oetterli, CEO of Rieter

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