SFC Energy AG — M&A Activity 2011

Oct 20, 2011

News Details

Ad-hoc | 20 October 2011 21:32

SFC Energy AG emphasis strategic focus on system supply by acquiring PBF Group B.V.

SFC Energy AG / Key word(s): Mergers & Acquisitions/Profit Warning

20.10.2011 21:32

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
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The issuer is solely responsible for the content of this announcement.

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Brunnthal/Munich, October 20, 2011 - SFC Energy AG (SFC) (listed in the
Prime Standard of Frankfurt Stock Exchange, ISIN DE0007568578, WKN 756857)
today signed a contract to acquire PBF Group B.V. (PBF), a Dutch company
with international operations specializing in switched mode power supplies
and higher level power management solutions.

This transaction is an important step in SFC's strategic orientation as a
systems provider and offers considerable growth potential by increasing
both companies' presence in existing markets, such as, industrial
applications, security, and defense as well as extending the customer base
into new markets, such as medical equipment.

The net purchase price amounts up to EUR 9.35 million, consisting of EUR
6.0 million in cash, 350,000 new SFC shares (at a valuation of EUR 5.70 per
share), and a performance-related earn-out payment up to EUR 1.35 million
in cash. The new SFC shares to be issued to the seller at closing derive
from authorized capital and are subject to a 24-month lock-up agreement.
The earn-out payment is linked to achieving defined targets in the 2012 and
2013 fiscal years. The transaction is expected to be completed before the
end of 2011.

For the current fiscal year SFC continues to expect organic sales growth of
approximately the same as last year's level, and a total turnover between
EUR 15 to 16 million - assuming the consolidation of PBF starts with effect
from December 1, 2011. However, 2011 earnings will be negatively influenced
by several one-off items amounting to approximately EUR 1.2 million. These
are mainly derived from the PBF acquisition as well as from a number of
recently initiated restructuring measures. In addition, management intends
to execute further restructuring and cost cutting measures during the
remainder of 2011 which could give rise to further negative one-off effects
of similar magnitude. Nevertheless, after adjusting for those special and
one-off effects, the Company expects a significant improvement in
underlying results from operating activities in 2011 when compared to the
previous year. Partly as a result of the acquisition of PBF and of the
benefit of the restructuring initiatives the group is expecting to achieve
break-even in the second half of 2012.

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Information and Explaination of the Issuer to this News:

Acquisition highlights

• SFC power generation expertise combined with PBF power management know
  how will offer a leading system solution competence

• Major growth potential for the combined SFC and PBF: increasing both
  companies' presence in existing markets (industry, security, defense)
  and extending the customer base into new markets, such as medical
  equipment

• Increased efficiency from shared use of development and production
  capacities in Germany, the Netherlands, and Romania, and from supply
  chain integration

• More balanced business portfolio - less dependability on leisure market
  seasonality and on low predictability of defense market

• Acquisition expected to contribute to results starting December 2011

About PBF Group

PBF develops, manufactures, and markets customized high tech power
solutions, from power supply units to complete power systems for producers
of professional machines and equipment. PBF translates these solutions into
actual products, integrating electrical engineering, electronics,
mechanical constructions and software. PBF is a fast growing company,
strongly driven by technological innovation. Among PBF's customers are
companies such as Philips, Bosch Security Systems, Thales, FEI Company or
Coherent; also ACAL BFi has been a long term partner providing a qualified
sales channel throughout Europe for PBF. PBF was originally spun out from
Philips Electronics NV through a Management Buy Out in 1999. The Company
with approx. 100 employees is headquartered in the Netherlands and operates
a R&D and production site in Romania.

In financial year 2010 PBF generated unaudited revenues of approx. EUR 9.0
million (2009: approx. EUR 7.0 million). For 2011 revenues of EUR 12 to 13
million are expected.

Acquisition background

SFC will bring its proven off-grid power generation expertise, its strong
market position in the leisure, industry and defense markets, an excellent
quality track record, and an established strong marketing and sales
structure into the new group. This will be ideally complemented by PBF's
power management competence, excellent customer base, and development and
production strength at its sites in the Netherlands and Romania.

Both companies' combined expertise supports the strategic orientation of
SFC as a systems provider and offers considerable growth potential to SFC
as well as to PBF by increasing both companies' presence in existing
markets, such as industrial applications, security, and defense, as well as
extending the customer base into new markets, such as medical equipment. In
the future 60 percent of the turnover is planned to be generated in
industrial applications. This will significantly reduce SFC's dependence on
seasonal fluctuations in the leisure business and on the defense segment's
traditionally low predictability. Major potential for increased efficiency
will result from development, production, and supply chain synergies.

As the number of mobile, off-grid, and grid-based power applications grows,
the combined SFC/PBF product portfolio is expected to increase both
companies' market presence. The aggregate revenues of the two companies for
the year 2011 are expected be in the range of EUR 26 to 27 million.

Management

The PBF founders will all become part of the combined Company: in the
future, the direction of group sales, the management of the Dutch and
Romanian locations, and the electronic system development will each be led
by a PBF manager.

'We are excited to become part of a leading and well capitalized power
solution provider such as SFC,' says Hans Pol, co-founder of PBF Group.
'Together, we will bring highly efficient, customized complete power
solutions to users world wide.'

'PBF's power management expertise complements SFC's power generation
strength and focus. This will create a technologically leading system
solution competence for off-grid and grid-based power solutions. We expect
direct growth opportunities and increased efficiency to result from
combining our customer bases, from sharing our development and production
capacities in Germany, the Netherlands, and Romania, and from supply chain
integration. A more balanced business portfolio is another advantage of
this acquisition', says Dr. Peter Podesser, CEO of SFC Energy AG.

Financial and Legal Advisors

FCF Fox Corporate Finance, Munich, Freshfields Bruckhaus Dehringer, Hamburg
and Amsterdam, and Deloitte, Munich and Amsterdam, acted as advisors to
SFC.

20.10.2011 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
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Language: English
Company: SFC Energy AG
Eugen-Saenger-Ring 7
85649 Brunnthal
Germany
Phone: +49 (89) 673 592 - 100
Fax: +49 (89) 673 592 - 169
E-mail: info@sfc.com
Internet: www.sfc.com
ISIN: DE0007568578
WKN: 756857
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, München, Stuttgart

End of Announcement DGAP News-Service

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