Oerlikon acquires Sulzer Metco and creates the global technology leader in Surface Solutions

• Oerlikon accelerates Group transformation
• Oerlikon acquires Sulzer Metco
• Oerlikon Surface Solutions business to become the largest Segment of the Group, further balancing, strengthening and expanding its portfolio
• Complementary technologies and business models, with unique product and service offering
• Increased market access and new customer segments
• Closing is subject to merger control

  This acquisition expands Oerlikon’s presence and capabilities in a core business segment. After careful portfolio shaping, this step marks Oerlikon’s first major transaction to expand its business inorganically. On a pro-forma basis the Groups sales (full-year 2012) will increase by 24 % to CHF 3.6 billion.

  “This step marks an important milestone for the Oerlikon Group, creating the technologically leading global product and service company for Surface Solutions. We are actively using our financial health and flexibility to shape a high-performing portfolio, which secures long-term profitable growth and value creation for all stakeholders in a sustainably growing industrial business close to our core”, said Oerlikon Group CEO Dr. Brice Koch.

  Oerlikon Balzers is the global technology leader in the service-driven PVD (physical vapor deposition) business. Metco is the global technology leader in the thermal spray and surface applications business. The combination will expand Oerlikon’s market in Surface Solutions to some CHF 9 billion. The two businesses are complementary in terms of their technological strengths, market access and geographical footprint, enabling them to increasingly meet customer requirements in the years to come. The combined businesses will operate some 130 facilities with over 110 coating centers in 35 countries around the world, employing around 6 000 people.

The combined businesses will form the new Surface Solutions Segment and have pro-forma sales of CHF 1.2 billion in 2012, constituting approximately 33 % of Group sales. It will be the largest Segment within the Oerlikon Group led by Dr. Hans Brändle as Segment CEO. Dr. Hans Brändle, CEO of Oerlikon Balzers said: “The combination of Balzers and Metco under one umbrella is a perfect fit of technologies, business models, R&D activities and market access for the benefit of our customers.”

Customer access, broad industry coverage, complementary business models

• Oerlikon Balzers' fast-growing components business will build on Metco’s strong application know-how where customers require a tailored solution for specific applications.
• The acquisition will also deepen access in new end-markets such as aerospace, defense, power, oil & gas, and accelerates growth outside the traditional precision tooling and automotive sectors.
• Metco will access Oerlikon Balzers’ well-established and highly successful service approach to further grow the thermal spray service business.
• Oerlikon Balzers’ proven ability to replicate successful market penetration is a key enabler for acceleration of the thermal spray and plasma nitriding services and rapid geographic expansion – especially in emerging markets.

Financing of transaction leaves flexibility for further steps

With nine strategic transactions since 2010 to shape the portfolio, and with significant underlying operational improvements, the Oerlikon Group has created a strong financial position with net liquidity of around CHF 1 billion. In line with the strategy to redeploy cash in a disciplined manner the transaction marks an important milestone in the long-term profitable growth of the Oerlikon Group. The acquisition will be financed via a combination of balance sheet cash and existing committed undrawn debt facilities.

Merger control

The closing of the transaction is subject to the approval of merger control in various jurisdictions.