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M&A Activity • Jul 12, 2007

News Details

Corporate | 12 July 2007 07:59

ARQUES subsidiary, SKW Metallurgie, takes over US-American ESM Group

ARQUES Industries AG / Acquisition

Release of a Corporate News, transmitted by DGAP - a company of EquityStory
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The issuer / publisher is solely responsible for the content of this announcement.

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• Acquired revenues of approx. USD 150 million, EBITDA margin of 7 to 8%
• SKW Metallurgie now world market leader in raw iron desulphurisation
• SKW Metallurgie’s strategic positioning substantially improved

SKW Stahl-Metallurgie Holding AG (ISIN DE000SKWM013), a 50% subsidiary of
the Starnberg-based equity investment company, ARQUES Industries AG (ISIN
DE0005156004), took over the US-American ESM Group Inc. from Platinum
Equity LLC. The ESM Group generated revenues of USD 150 million in 2006 and
is the North American market leader in raw iron desulphurisation. Through
this acquisition, SKW Metallurgie, thus far European market leader, now has
the strategically important access to the US market and has become world
market leader in this segment with a market share of approx. 20%. The
takeover of ESM substantially improves the strategic positioning of the
ARQUES subsidiary, SKW Metallurgie, as a global player as well as
increasing the value of the group.

SKW Metallurgie plans upward adjustment of guidance for middle of November

The cash component of the purchase price will amount to around USD 60
million. In addition, a working capital loan of around USD 15 million will
be assumed. The final purchase price will be determined at the closing of
the transaction, and will be financed from SKW Metallurgie’s existing
liquidity and by debt. Due to ESM’s profitability being above average
(EBITDA margin of approx. 7 to 8%), SKW Metallurgie is already expecting a
significant contribution to operating income in the year of the takeover.
At the time of the publication of the financial report for the third
quarter on November 12, in which the ESM Group will be consolidated for the
first time, SKW Metallurgie plans to publish an updated guidance for the
current year and the period until 2011. The initial consolidation will take
place after closing the transaction, presumably towards the middle or end
of August 2007. The transaction is subject to the approval of the relevant
cartel authorities.

Transaction offers SKW Metallurgie high synergy potential and opportunities
for expansion

Through this acquisition SKW Metallurgie can substantially expand its
business activities in the USA, in particular within the magnesium-based
raw iron desulphurisation range. In addition to the backward integration in
the value chain by securing raw material access to the magnesium compounds,
the transaction offers further important opportunities and potential for
the ARQUES subsidiary, for example more efficient utilisation of locations
as well as raw material procurement. The takeover of the ESM Group has also
enabled SKW Metallurgie substantially better access to the regions and
sales markets considered to be growth and expansion markets, for example
Eastern Europe and South America, as well as to higher-margin service
activities along the value chain.

ARQUES acquired SKW Metallurgie at the end of August 2004 from Degussa. In
December 2006 ARQUES had SKW Stahl-Metallurgie Holding AG listed on the
stock exchange and presently holds 50,3%. The acquisition of the ESM Group,
assisted by the ARQUES M&A department, is the tenth acquisition in the
ARQUES group in the current year.

Further information regarding SKW Metallurgie and this transaction can be
found on the website: www.skw-steel.com

About ARQUES

ARQUES Industries AG, Starnberg, (www.arques.de), is a turnaround
specialist who focuses on the acquisition and the active restructuring of
companies in transitional situations, in order to develop these, with its
own team and own resources, to competitive enterprises with a positive
yield. ARQUES revitalises its subsidiaries' potential for creating value
for the benefit of all its stakeholders, taking on the relevant social
responsibility. ARQUES has made a duty of identifying underestimated
companies with reduced survivability but with high appreciation potential,
at the same time mastering complex company structures and transitional
situations. The shares of ARQUES Industries AG are traded in the regulated
market (Prime Standard) of the Frankfurt Stock Exchange under the symbol
'AQU' (ISIN: DE0005156004) and are listed in the SDAX since September 19,
2005.

ARQUES Industries AG
Investor Relations & Corporate Communication
Anke Lüdemann, CEFA/CIIA
Email: luedemann@arques.de

Public Relations
Christian Schneider
Email: schneider@arques.de

Tel.: +49 (0) 8151/ 651 0

DGAP 12.07.2007

Language: English
Issuer: ARQUES Industries AG
Münchner Str. 15a
82319 Starnberg Deutschland
Phone: +49 (0)8151 651-0
Fax: +49 (0)8151 651- 500
E-mail: info@arques.de
Internet: www.arques.de
ISIN: DE0005156004
WKN: 515600
Indices: SDAX
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin-Bremen, Hamburg, Düsseldorf, München, Stuttgart

End of News DGAP News-Service

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