Milan, 18th December 2021, Intek Group S.p.A., investment company listed at the Milan Stock Exchange, announces today the signing of the final agreement between its controlled companies KME SE (“KME”) and KME Special Products GmbH & Co. KG (together “KME  group”)  and  The Paragon  Fund  III  (hereinafter  “Paragon”) for the transfer of control of the Special business of KME group. 

The executed agreement, by which the Special business will be contributed to a newco (“Newco”) owned 55% by Paragon and 45% by KME group, is the result of the fullfilment of conditions underlying the agreement reached between the parties on 15th June 2021, as already announced  to the market.

With a commercial presence in over 70 countries, KME Special business has a highly recognized worldwide  leadership in the production of copper moulds for the global steel industry as well as in  the manufacturin of high corrosion resistance products mainly used in the naval and petrochemical industries. Perimeter of the transaction includes four manufacturing plants (based in Germany, Italy, US and China) as well as seven  fully dedicated service centers (based in India, Mexico, Turkey, Spain, Russia and Ukraine) with over 1000  employees worldwide, revenues of around € 260 million and Ebitda of around € 44 million in Y2020.  The transaction includes also the execution, at closing, of ancillary agreements ‐ both transitional and long  term between KME group and Newco, e.g. Service, Lease and Supply agreements, as well as  a shareholders  agreement  (the  “Shareholders’Agreement”)  regulating  the  relationships  between  the  joint  venture  shareholders during the investment period and at exit.  Closing of the transaction will be only subject to the merger control clearance by the German and  Austrian competition  authorities. 

The transaction  is  financed  by  Paragon’s  own/managed  funds  and  a  dedicated  financing package provided by Hayfin Capital Management.  At closing, KME will cash in a net amount of around € 200 million after a repayment of around € 20 million of intragroup working capital facilities and after having provided a € 32 million shareholder  loan (the “KME  vendor loan”) to Newco.  The transaction will significantly improve KME net worth and reduce its net financial position pushingforward the overall group strategy of focusing on the core business of Rolled Products, that is expected to be very  positive in this decade, also through additional add-ons.

Finally, through  the joint venture structure, KME  group will participate in the future value creation
of Special business led by Paragon, with strong and solid  opportunities to further increase the returnout of the current transaction.