AFG and Looser aim to combine operations to become a leading European building supplier

• Having signed a share purchase agreement on 14 September 2016, AFG Arbonia-Forster-Holding AG ("AFG") will acquire 2,026,928 Looser shares corresponding to 53% of the Looser share capital from the former family shareholders, members of the Board of Directors and the executive management of Looser Holding AG ("Looser"), at a price of five and a half (5.5) newly issued registered AFG shares plus CHF 23.00 in cash per Looser share.
• On this basis, AFG today announced a public tender offer ("Offer") for all publicly held Looser registered shares.
• The public shareholders are being offered the same conditions as the former family shareholders, members of the Board of Directors and the executive management of Looser.
• The offer represents a premium of 38.8% compared to the closing price of 14 September 2016.
• On the basis of the closing price of AFG on 14 September 2016 and the Looser Group's net indebtedness of CHF 94.5 million as of 30 June 2016, the offer represents an enterprise value of around CHF 511 million.
• The Looser Board of Directors unanimously recommends to its shareholders to accept the offer from AFG.
• Looser is based in Arbon (CH) and, same as AFG, is active primarily in the building supplies industry, particularly in the doors sector, whereby the two companies ideally complement each other in geographic terms and with regard to the product ranges.
• The combination will place the Group among the market leaders in the area of windows and doors, as well as in the field of water-based heat transfer in building technology, and in Switzerland it will be a market leader in the area of mobile infrastructures. Assuming stable market conditions, the Group expects combined revenue of at least CHF 1.4 billion and an EBITDA of at least CHF 150 million in 2018.
• It is also expected, assuming stable market conditions, that the combination will lead to annual synergies of around CHF 10 million from 2018 and at least CHF 15 million from 2020 onwards. Providing stable financing and market conditions, the combination between AFG and Looser, including the acquisition of Koralle, is expected to result in an earnings accretion per share of around 20% per year between 2017 and 2020.
• In connection with the offer, on the occasion of an extraordinary general meeting on 1 November 2016, AFG is planning to create new authorised capital amounting to 20,908,250 shares (CHF 87,814,650 million nominal value). In addition, AFG is proposing to the extraordinary general meeting to elect two new members of the Looser Board of Directors to the AFG Board of Directors.
• Going forward, the company is set to operate under the name "Arbonia AG" in reference to the location of both companies' headquarters.
• After the closing of the transaction and assuming the acquisition of all LOHN registered shares by AFG the current Looser shareholders will retain around 31% of Arbonia AG, whereby the biggest Looser family shareholders, who will retain around 14.7%, have committed to a lock-up up until 15 September 2017.
• Committed bank financing amounting to CHF 500 million will provide for, on the one hand, the cash component of the initial share purchase and the public tender offer of a maximum of CHF 87.4 million, and on the other hand, the refinancing of existing financial debt of AFG and Looser.
• Alongside the announcement of the Offer, AFG is announcing that the relevant competition authorities have given clearance for the takeover of the Koralle Group announced on 29 June 2016 and that the closing is scheduled for 20 September 2016. It is intended to refinance the acquisition ahead of the launch of the public tender offer by means of a private placement of 2.64 million new AFG shares.

Arbon, 15 September 2016 − AFG Arbonia-Forster-Holding AG (SIX: AFGN) reached an agreement with the Board of Directors of Looser Holding AG (SIX: LOHN) on 14 September 2016 to submit to their shareholders a public tender offer for all publicly held registered shares. The public shareholders will be offered five and a half (5.5) registered shares in AFG plus CHF 23.00 in cash for each LOHN registered share. In addition, on 14 September 2016 AFG made the commitment to acquire 2,026,928 LOHN registered shares from the former main shareholders, members of the Board of Directors and members of the executive management of Looser, which corresponds to 53% of all Looser shares, at a price equal to the price in the public tender offer. Looser is based in Arbon and, same as AFG, is active primarily in the building supplies and equipment industry, particularly in the doors sector, whereby the two companies complement one another optimally with regard to the product ranges and manufacturing sites. Subject to the approval of shareholders from both companies and of the competition authorities, the planned transaction will represent a significant step forward for AFG in terms of achieving its strategic goal of becoming a leading European building supplier. Likewise, it will form the basis for substantial growth within a profitable business with great prospects for the future. Alongside the doors business, the Industrial Services segment (Condecta) will also be transferred independently to the new Group. For the Coatings Division Looser will continue the sale process as announced on 9 August 2016 in alignment with AFG. AFG plans to have the LOHN shares delisted from the SIX Swiss Exchange after completion of the offer and to initiate a squeeze-out process. As part of the transaction, plans are underway to change the company name from AFG Arbonia-Forster-Holding AG to Arbonia AG. The issuance of new AFG shares will enhance the trading liquidity and the free float of the future Arbonia share.

The combination between AFG and Looser will create one of the largest suppliers in central European markets in the field of internal doors. As has already been communicated, AFG aims to reduce its dependence on the Swiss market with regard to the special doors business and to use new sales channels to tap markets such as Germany and other European countries. With its RWD Schlatter business, AFG is one of the leading providers of special doors in Switzerland. In contrast, Looser holds a strong position in Germany and Poland thanks to Prüm-Garant and Invado. Through this combination, Prüm-Garant is set to gain access to the Swiss and RWD Schlatter to the German market, meaning that both companies benefit from the respective existing market position, and the customer relationships of each company will benefit from each other. Similarly, the product ranges of Prüm-Garant and Invado complement those of RWD Schlatter. In terms of manufacturing there is a network of four specialised production facilities, whereby two are located in low-cost regions of Europe. The new scale of the company also creates cost advantages in purchasing. There are plans to incorporate the Doors Division of Looser (Prüm-Garant and Invado) into the Building Security Division as an independent business unit.

Alongside the doors business, with Condecta AG the Industrial Services Division will also join Arbonia AG. Condecta provides complete solutions (mobile infrastructures) in the construction, industry, trade, public sector and event services (large-scale events) sectors. The business comprises rental and sale of spatial systems, cranes, construction and technical equipment and mobile sanitary equipment. Condecta is characterised by a high level of profitability and strong market penetration in Switzerland. In addition, just a few days ago Condecta completed the acquisition of WMS WC-Mietservice GmbH (mobile sanitary equipment), based in Reichenburg (CH).

With regard to the Coatings division, Looser will continue the sale process as announced on 9 August 2017 in coordination with AFG.

Overall, the combination between AFG and Looser is expected to result in annual synergies of around CHF 10 million from 2018 and of at least CHF 15 million from 2020 onwards, assuming stable markets. These include cost reductions and synergies in procurement and are expected to increase in the medium term through additional returns from the mutual market access in Germany and Switzerland, as well as the opportunity to act as full-range supplier in the Group's relevant doors markets.

Taking into account the potential from synergies as well as the restructuring and relocation processes already underway (as announced in 2015), AFG expects that in the year 2018 the new Group will achieve revenues of around CHF 1.4 billion (after the sale of the Coatings Division) and an EBITDA amounting to at least CHF 150 million, assuming stable markets. From that point onwards Arbonia Group will have sustainable free cash flows and dividend capacity. In addition, the Group is assuming that the combination and the acquisition of the Koralle Group will increase earnings per share (after synergies and integration costs) from 2017 to 2020 by around 20% per year vs. the standalone business plan of AFG, assuming a comparable financing situation, stable markets and before purchase price allocation.

"Through the combination, the Group is reaching a leading market position in all divisions and is positioning itself outstandingly well as a focused building supplier in the central European markets. Going forward, this forms the basis for further significant earnings potential," says Alexander von Witzleben, Chairman of the Board of Directors and CEO of AFG, commenting on the planned takeover.

Alongside the Group's position as market leader in the area of windows and doors, it also features new, location-optimised production capacities, providing an opportunity to benefit from organic growth prospects that arise. In the Building Technology Business Unit the Group ranks among the market leaders with regard to core products in the area of water-based heat transfer. With the completion of the Koralle acquisition, it will also become one of the biggest suppliers of shower enclosures in central Europe, and with the integration of Looser's Industrial Services Division a highly profitable fourth division, ranking among the Swiss market leaders, will join the Group.

For the aforementioned reasons, the Boards of Directors of AFG and Looser have come to the conclusion that the announced combination is in the best interests of the relevant businesses, shareholders, employees and other stakeholders. In line with this, the Looser Board of Directors unanimously recommends to its shareholders to accept the public tender offer submitted to them by AFG. At the same time, the AFG Board of Directors unanimously recommends that its shareholders approve the capital increase required for the offer.

The Chairman of the Board of Directors and Acting CEO of the Looser Group, Rudolf Huber, comments positively on the planned combination: "With its strong market position in the area of doors and industrial services, Looser is a perfect fit for AFG. The cultural proximity is also important. Both companies are based in Arbon. Particularly in the doors business, we see a number of common market opportunities and are convinced that a combination of our two companies has a strong strategic and operational rationale and therefore will create substantial value potential for the shareholders of Arbonia AG."

It is envisaged to simplify the company name AFG Arbonia-Forster-Holding AG during the course of this transaction and to name the listed holding company Arbonia AG. By giving the company a new identity, AFG aims to recognise the combination, reflecting the fact that both Looser and AFG are based in Arbon. The AFG Board of Directors is calling upon the extraordinary general meeting to change the company name from AFG Arbonia-Forster-Holding AG to Arbonia AG. AFG's subsidiary operating in the field of heating technology, Arbonia AG, will thus be renamed.

The pre-announcement of the offer published today includes the most important provisions and conditions of the public tender offer. Alongside other offer conditions, the offer is subject to the approval of the relevant competition authorities. The pre- announcement and other offer documents are available at www.afg.ch/en/servicenavigation/publikationen.

The transaction agreement constitutes rights and obligations on AFG and Looser with regard to the offer from AFG. A summary of the material conditions of the transaction agreement will be part of the offer documents of AFG, which are scheduled to be published on 29 September 2016 and will then be made accessible together with other offer documents at www.afg.ch/en/servicenavigation/publikationen. The offer period is expected to begin on 14 October 2016 and to end on 10 November 2016. The transaction is expected to be completed by mid-December 2016.

UBS is acting as exclusive financial advisor for AFG as well as tender agent for the public tender offer. The financial advisor for Looser is N+1 Swiss Capital.

Estimated timetable

The risk factors for the transaction will be published as part of the offer documents and are already available in advance at www.afg.ch/en/servicenavigation/publikationen.

Acquisition of Koralle Group cleared

Following the clearance of the acquisition by the competition authorities in Germany and Austria, it is expected that the acquisition of the Koralle Group, which operates in the sanitary equipment industry, will be closed on 20 September 2016.

For the refinancing of the Koralle acquisition, AFG intends to soon, i.e. before the launch of the public tender offer, execute a capital increase from existing authorised capital through the issuance of 2.64 million newly created registered shares. The transaction takes place in the form of a private placement close to the then prevailing share price prior to the launch and with exclusion of subscription rights. The capital raising allows to keep the net indebtedness steady at an appropriate level. The final issue price will be determined by way of a bookbuilding process, to which selected investors will be invited within the context of a private placement. In connection with the planned placement, AFG anchor shareholder Michael Pieper and his Artemis Beteiligungen I AG have expressed the intention to subscribe for all of the newly created shares by way of a backstop, provided they are not allocated to other investors at the same or at a higher issue price. He thus emphasises his continuing commitment to AFG, while in any case remaining below the threshold of 33 1/3% of voting rights.

Contact

Further important information

This press release, the factsheet on the two companies, the pre-announcement for the public tender offer, the risk factors for the transaction as well as further information on AFG and Looser can be found on our websites at www.afg.ch and at www.looserholding.com.

About AFG and Looser

AFG is a focussed building supplier that is listed on the SIX Swiss Exchange and has its head office in Arbon, in the canton of Thurgau (Switzerland). The group is active worldwide with over 30 distribution companies as well as offices and partners in more than 70 countries. Its main production sites are located in Switzerland, Germany, the Czech Republic, Poland, Slovakia and Italy. AFG employs a total workforce of around 6200.

The various business units/companies that make up AFG are active in the following sectors: heating technology, air-conditioning/ventilation technology, sanitary equipment, windows and exterior doors, profile systems and special doors. In these core sectors, each year AFG companies convert around 2,700,000 m2 of glass for windows and shower enclosures, 87,000 doors, 3000 km of steel profiles, 15,000 km of wood and PVC profiles for windows, more than 2.5 million radiators and in excess of 100,000 fan coils.

Looser Holding AG is an internationally active industrial holding based in Arbon (Switzerland). The Group of companies operates in the areas of coatings, industrial services and doors. Around 2,200 employees work for the Group in 16 operational companies in Europe, Asia and the USA. The registered shares of Looser Holding AG are listed on the SIX Swiss Exchange (Swiss Reporting Standard). www.looserholding.com