Metall Zug and Miele create joint venture in Infection Control and Life Science area - Belimed and Steelco bundle forces

Metall Zug will contribute its Business Unit Infection Control and the Belimed Life Science Group, and Miele will contribute its Steelco Group, into a new joint venture to be established in Zug, Switzerland. Metall Zug will receive a 33% stake in the joint venture. The joint venture will be jointly managed, with Metall Zug providing two out of the five board members. Operational management is intended to be carried out by a composite team with representatives from Belimed, Steelco and Miele. A shared brand identity is planned for the future, which will take into account the roots of both companies.

The transaction is subject to the approval of the relevant authorities. The approval of the authorities is expected in the first half of 2024.

Background and market environment

The global healthcare and life science market has become one of the fastest growing industries worldwide in recent years. Demand for equipment, services and chemicals for the cleaning, sterilization and disinfection of medical and surgical instruments and of pharmaceutical products has grown. This is mainly due to the increasing number of medical surgeries and the increased requirements for hygiene standards in hospitals and laboratories. Life Science is further benefiting from the continued re-shoring of pharmaceutical manufacturers and capacity expansions in the production of vaccines and cancer medications.

The increasing number of sterilized goods results in customers demanding higher throughput, faster cycle times, higher automation rates and integrated solutions. This is linked to investments in additional capacities, new technologies and overall digitalization.

Aim of the transaction

The transaction represents a unique strategic option for both companies involved and offers a promising and sustainable perspective in the combined group. "Steelco and Miele are strong and reliable partners whose dynamic growth and long-standing expertise make them an excellent match for us and our shared plans for the future", explains Martin Wipfli, Chairman of the Board of Directors of Metall Zug AG. The combination will significantly strengthen the market position of both companies. Through the bundling of their forces in the joint venture, Belimed and Steelco can speed up their development to become the most innovative and customer-oriented provider in the field of infection control and life science. The joint venture aims to combine the best of both companies by exploiting synergies, sharing know-how and experience, and optimizing the global production and distribution network, while at the same time driving forward the development of high-quality products and digital solutions. The combination will release growth and cost synergies on the one hand but will also involve additional investments on the other.

Together, Belimed and Steelco have set out to become the most reliable partner for complete solutions and to offer customers a unique approach. Belimed is characterized by its strong regional presence in growth markets, particularly in the USA and China, with a large installed base and a strong service business. Belimed also has excellent expertise in the area of new digital solutions (SmartHub). Steelco, on the other hand, brings its broad and competitive portfolio of washer-disinfectors, its fast innovation cycles and its expertise in automation and workflow management. In addition, Steelco has a strong presence in Europe.

Advantages of the joint venture for customers and employees

The customers benefit from an expanded and more efficient product portfolio with customized solutions as well as from a competent and fast service. At the same time, there is potential for synergies in research & development, production, marketing and service for an even more innovative, customer-centered approach.

The joint venture partners as well as Belimed and Steelco share comparable values and complement each other in their markets, products and competences. The transaction will open up new perspectives and growth opportunities for all parties involved, including the employees. To be successful, the joint venture is relying on their cooperation, expertise and experience.

Long-term commitment of the Metall Zug Group - Further milestone in the implementation of the strategy

In 2019, the new strategy was communicated to transform Metall Zug AG into a holding company with substantial investments in attractive industrial companies. The transformation was initiated in 2020 with the spin-off and independent stock exchange listing of V-ZUG, in which Metall Zug since then holds a 30% stake. In 2022, the second step in the implementation of this strategy was taken with the combination between Schleuniger and Komax and a 25% stake. The pending joint venture between Belimed (Infection Control and Life Science) and Steelco represents a further milestone and the final planned step in the implementation of this strategy. Metall Zug will focus strategically and operationally on the development of its fully controlled Business Units Medical Devices, Technologycluster & Infrastructure and of Gehrig Group AG. The interests held in V-ZUG, Komax and the joint venture with Steelco are strategic and long-term investments in which Metall Zug is confident of their value development.

The joint venture is designed for a period of 10 years. Metall Zug makes a long-term commitment – both financially and in terms of personnel engagement. The areas of Infection Control (hospital sector) and Life Science (pharma and laboratories) will remain largely independent Business Units within the joint venture, with a focus on the respective specific customer needs.

In the financial year 2022, the Belimed Group (Business Unit Infection Control) and the Belimed Life Science Group together achieved net sales of CHF 229 million and EBIT of CHF -2.3 million with around 1,300 employees. The Steelco Group achieved net sales of EUR 194 million and EBIT of EUR 14 million in 2022 on a comparable basis with around 800 employees.

Investor call

Metall Zug will hold an investor call today, November 28, 2023, at 10:00 a.m. CET, to further explain the proposed transaction. Dial-in details can be obtained via bettine.killmer@metallzug.ch.