Information on the Target

Groupe Acrotec SA is a prominent Swiss supplier that specializes in precision components primarily for the luxury watch industry, as well as various high-value industrial markets. Established by professionals from the watch and micro-mechanical sectors, Acrotec employs approximately 600 individuals and is recognized for its commitment to delivering 'Swiss made' quality products. The group simplifies the complexities of subcontracting by providing a diverse range of competencies, such as metal cutting, crimping, and surface treatment.

Acrotec produces critical components for the watch industry, including springs, shock absorbers, and oscillating weights. The company has also expanded its offerings to cater to end-markets such as medical devices, connectors, telecommunications, automotive, and aerospace industries.

Industry Overview in Switzerland

Switzerland is renowned for its luxury watch industry, home to prestigious brands that greatly value precision and high-quality craftsmanship. The sector has continually experienced growth, driven by strong global demand for luxury goods, particularly in emerging markets. Swiss watchmakers are known for their meticulous attention to detail, leading to an esteemed reputation that bolsters both local companies and related suppliers.

In recent years, the global luxury watch market has faced challenges, including changing consumer preferences and increased competition from smartwatches. However, the industry's commitment to innovation and quality has allowed it to adapt and thrive. Acrotec, as a key supplier, plays a vital role in supporting this sector with its expertise in precision components.

Additionally, Switzerland has a robust industrial manufacturing sector that includes aerospace and medical technology. The skills and techniques derived from the luxury watch industry have proven advantageous in these sectors, as the demand for precision parts continues to grow. This presents significant opportunities for suppliers like Acrotec to expand their market reach.

Overall, while challenges persist, the luxury watch market in Switzerland remains resilient, underpinned by a strong customer base and innovative practices. With the ongoing focus on quality and excellence, the outlook for companies like Acrotec remains positive.

The Rationale Behind the Deal

The acquisition of Groupe Acrotec SA by Castik Capital, alongside Acrotec's management, is aimed at securing the company's independence while fostering a foundation for substantial growth. The deal, valued at approximately CHF 280 million, marks a pivotal moment in Acrotec's evolution, allowing it to align with a partner focused on long-term value creation.

Castik's commitment to active partnerships will enhance Acrotec’s strategic direction, enabling it to further consolidate its competitive position in the luxury watch market and diversify into other industrial segments. The investment is adaptable, with opportunities for organic growth and strategic acquisitions to enhance Acrotec's offerings.

Information about the Investor

Castik Capital S.à r.l. is a European private equity investment firm that focuses on acquiring significant ownership positions in both private and public companies in Europe. Founded in 2014 and based in Luxembourg, Castik aims to generate long-term value through active collaboration with management teams. The firm boasts a longer investment horizon, allowing it to concentrate resources on its portfolio companies effectively.

Castik manages the EPIC I SLP fund, which closed with total commitments of EUR 1.0 billion in August 2015. This financial capacity enables Castik to remain agile and responsive to market opportunities, supporting its portfolio companies' growth trajectories through strategic investments.

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In my expert opinion, the acquisition of Groupe Acrotec SA by Castik Capital represents a strategically sound investment. Acrotec's established reputation and expertise in the luxury watch component sector, combined with its potential for growth in related industrial markets, make it an attractive asset for investors.

Castik's focus on long-term value creation aligns well with Acrotec's strategic vision, ensuring that the company will continue to innovate and expand. The expected emphasis on acquisitions will further enhance Acrotec's market share and operational capabilities, ensuring its competitive edge remains intact.

Moreover, the resilience of the luxury watch market, along with Acrotec's established blue-chip customer base, positions the company well for sustained growth. This investment will likely yield positive returns over time, making it a favorable opportunity for Castik and its stakeholders.

Ultimately, the partnership between Castik and Acrotec represents a synergy poised for success, with the potential to navigate industry challenges effectively while capitalizing on future growth opportunities.

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