Fairness Opinion for StarragTornos

Fairness Opinion on the assessment of the financial adequacy of the exchange ratio in the context of the planned merger between Starrag Group Holding AG and Tornos Holding AG.

Transaction
Author
IFBC Team
Date
7/11/2023

Fairness Opinion on the assessment of the financial adequacy of the exchange ratio in the context of the planned merger between Starrag Group Holding AG and Tornos Holding AG.

On 26 October 2023, Starrag Group Holding AG (Starrag) and Tornos Holding AG (Tornos) announced that they had examined a merger of the two Groups of companies and signed a corresponding merger agreement. The merger under the Merger Act to form StarragTornos Group AG (StarragTornos) is expected to be approved at Extraordinary General Meetings of the two companies at the end of November. The market capitalization of the two companies was approximately CHF 290 million (pro forma) as of 17 October 2023.

The existing Starrag shares (3,360,000 registered shares at a nominal value of CHF 8.50 each) will remain in place and will be converted into registered shares of StarragTornos by a change of company name. 2,103,121 new shares will be issued by means of an ordinary capital increase of CHF 17,876,528.50 from CHF 28,560,000 to CHF 46,436,528.50. As part of the transaction, an exchange ratio of 1 Tornos share to 0.1059 Starrag shares was defined. The registered shares of Tornos shall be delisted and the newly issued registered shares of StarragTornos shall be listed on the SIX Swiss Exchange.

The planned merger to form StarragTornos will create a new, strong Group that will play a major role in shaping the future of the global metal-cutting machine tool industry. The technologies and solutions of Starrag and Tornos “Rooted in Switzerland” are world leaders. The merger will make it possible to significantly increase the global market presence, particularly in America and Asia, and to better serve industries such as medical technology and luxury goods. The complementary companies will increase operational efficiency and offer promising prospects for all stakeholders.

Support by IFBC

As part of the planned absorption merger, Tornos shareholders are to receive 0.1059 Starrag shares for every share held. IFBC prepared for the attention of the Boards of Directors of Starrag and Tornos an independent fairness opinion in accordance with the Merger Act to assess the financial adequacy of this exchange ratio.

About Starrag Group

Starrag Group is a global technology leader in manufacturing high-precision machine tools for milling, turning, boring and grinding workpieces of metallic, composite and ceramic materials. Customers include the leading companies in the customer industries aerospace, energy, industrial, micromechanics, and transportation. The portfolio of machine tools combined with extensive technology and services enables customers to make substantial progress in quality and productivity. The Starrag umbrella brand combines the Berthiez, Bumotec, Dörries, Droop+Rein, Ecospeed, Heckert, Scharmann, SIP, Starrag and TTL product divisions. Headquartered in Rorschacherberg, Switzerland, the Group operates production and development sites in Switzerland, Germany, France, the UK and India, as well as sales and service companies in key customer countries.

About Tornos Group

Tornos Group is one of the global leaders for the development, production, and distribution of Swiss-type automatic lathes and multispindle turning machines. The company’s history dates back to 1880 and marked the beginning of Swiss-type lathe technology. The company primarily manufactures CNC sliding headstock Swiss-type automatic lathes, multispindle machines, and precision machining centers for complex parts. Tornos is headquartered in Switzerland. A worldwide sales and service network offers unique solutions to customers in the target automotive, medical and dental technology, micromechanics, and electronics industries.

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