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Walter Meier Ltd. and Tobler Haustechnik AG are to integrate, creating a leading Swiss building technology provider.

Walter Meier is to pool its systems and service skills with Tobler’s retail and logistics expertise. The move to join forces will create a leading building technology company for Switzerland with a wide range for the wholesale of products, components and accessories and covering heating and cooling systems as well as the service business.

Tobler generated sales of around CHF 330m in the past financial year, employing some 700 staff. In terms of their current profitability, Tobler and Walter Meier are very similar, meaning that the two companies are set to merge in a ratio of 1:1. Rather than doubling, however, the number of Walter Meier Ltd. shares will only beincreased by 4,705,412 from its present level of 7,294,588. A payment of CHF 117.8m to Wolseley has been destined to cover the remainder and even out differences relating to items on the two companies’ balance sheets, with bank loans furnishing the necessary liquidity.

UK-based heating and plumbing distributor Wolseley will hold around 39.2% of Walter Meier shares once this transaction is complete. Current major shareholder Silvan G.-R. Meier, who holds his stake via Greentec AG, is backing the transaction.

He is to lose his majority stake in Walter Meier Ltd. and will hold 33.5% of Walter Meier shares. The capital increase that Walter Meier Ltd. is to carry out will see the current shareholders lose their subscription rights, which will be transferred to Wolseley. The two largest shareholders, Silvan G.-R. Meier (via Greentec AG) and Wolseley, will exercise joint control of Walter Meier Ltd. under a shareholders’ agreement.

As things stand, Walter Meier expects its net debt to increase to around CHF 170m as of year-end 2017. Walter Meier forecasts that the new company should be in a position to generate EBITDA of more than CHF 60m over the long term once the integration process is complete. A steady reduction in net debt should therefore be possible over subsequent years, even if the current dividend
policy is maintained.

Combination in 2017, new company to launch in 2018 As the situation stands, implementing the combination between Walter Meier and Tobler should be achievable in the second quarter of 2017. It will hinge on the Annual Shareholders’ Meeting of Walter Meier Ltd. approving the necessary capital increase and on the planned combination being passed by the Swiss Competition Commission.

The transaction will introduce a new Group Management team. The current CEO of Walter Meier Ltd., Martin Kaufmann, will remain responsible for managing the company. His deputy will be the present CEO of the Tobler Group, Arnold Marty, who will be in charge of sales, product management and marketing. The Tobler Group’s current CFO, Andreas Ronchetti, is to hold the same role in the new company and will also be the third member of its Group Management. His counterpart at Walter Meier Ltd., Matthias Ryser, will leave Group Management and be in charge of integrating the two companies.

The two companies will enter the market in early 2018 under a new, shared name.