KKR ACQUIRES 7 BUSINESSES FROM SIEMENS AG

London, July 26, 2002 - Kohlberg Kravis Roberts & Co. L.P. ("KKR") announced today that it has agreed to acquire seven businesses from Siemens AG ("Siemens") for a transaction value of €1.69 billion.

The businesses being acquired include: (1) Mannesmann Plastics Machinery AG (MPM), the leading producer of injection molding and extrusion machinery for plastics manufacturing, (2) Demag Cranes and Components (DCC), the largest world-wide designer and manufacturer of cranes and crane accessories for industrial applications, (3) Gottwald Port Technology, a supplier of harbor logistics solutions, (4) Stabilus, a producer of gas springs and hydraulic dampers, (5) Network Systems, a provider of network integration services in the UK, France & Italy, (6) Metering, a manufacturer of electricity and heat meters and (7) Ceramics, a supplier of technical ceramics. The seven businesses have a combined turnover of about €3.5bn.

Although owned by a common holding company formed for this acquisition, each business will be managed separately. KKR will own 81% of the new holding company, called Demag Holding s.a.r.l. (Luxemburg), with Siemens retaining a minority investment of 19%.

KKR and Siemens worked exclusively on this opportunity for six months as both committed significant resources to the transaction, which is unique in its scope and size. In 1999, KKR acquired Siemens Nixdorf Retail and Banking Systems GmbH, renamed Wincor Nixdorf GmbH & Co. KG, from Siemens.

Johannes Huth, Managing Director of KKR in London, said, "This portfolio of companies provides a unique opportunity to acquire businesses with solid franchises and experienced management teams in a range of markets. Each business is a market leader and we believe there are considerable opportunities to work with the incumbent management and to continue to build the individual businesses."

The completion of the transaction is subject to necessary regulatory approvals, which are expected by the end of September. Financing for the transaction is being arranged by CIBC World Markets, HVB, and JP Morgan plc. Deutsche Bank acted as sole M&A advisor to KKR and CIBC World Markets provided complimentary advisory services. Siemens was advised by Goldman Sachs and Morgan Stanley.

Kohlberg Kravis Roberts & Co. is one of the world's leading private equity firms. Its investment approach is focused on investing in attractive businesses and working closely with management over the long term to design and implement value creating strategies. Founded in 1976, KKR has completed more than 100 transactions in North America and Europe. KKR has completed nine transactions in the UK and continental Europe since 1996. Its current portfolio consists of 30 companies based in the US, Canada, Germany, Austria and the UK, including Amphenol, Rockwood Specialties (acquired from Laporte plc), Tenovis (formerly Bosch Private Networks), Willis Group (formerly Willis Corroon), Shoppers Drug Mart, Alliance Imaging, Wincor Nixdorf (formerly Siemens Nixdorf), and Zumtobel.

Contacts:

Penrose Financial
+44 (020) 7786 4888
Andrew Nicolls
+44 (020) 7786 4881
Will Bowen
+44 (020) 7786 4877

Kekst & Co (US)
Ruth Pachman
+1 (212) 521 4891
Molly Morse
+1 (212) 521 4826

Notes to Editors:

The Businesses being bought:

Mannesmann Plastics Machinery (MPM)
MPM is the world market leader in plastics machinery, with a particularly strong position in the injection-molding and extrusion segments. The business is diversified across multiple end markets (automotive, packaging, electrical, consumer, medical), geographies (North America, Europe), and machine sizes, with six well-established brands.

Demag Cranes & Components (DCC)
DCC is a global engineering company with leading world market positions in standard and process cranes and handling technology. DCC operates in three markets: cranes, handling technology and drives.

Gottwald Port Technology
Düsseldorf, Germany-based Gottwald is the world market leader for harbor cranes and transport technology.

Stabilus
Stabilus has a strong leadership position in the worldwide gas spring market. Its products are used mainly for automotive, furniture and industrial applications.

Network Systems
An enterprise network services provider with leading market positions in the UK and France, the company has an established reputation among large corporate customers, especially in the financial services industry.

Metering
Metering is a leading manufacturer of electromechanical and digital electricity meters for residential, industrial and grid applications and a supplier of ultrasonic meters. The company is based in Switzerland and active worldwide.

Ceramics
Ceramics is a supplier of technical ceramics devices including catalytic converters for power plant applications and insulators for electricity infrastructure applications.

Back to 2002 Archive