Valora to buy highly profitable Ditsch/Brezelkönig group of companies

Unique opportunity for strategically significant acquisition – strong anchor shareholder secured for Valora

• Acquisition of Ditsch/Brezelkönig gives Valora additional retail format with leading position in German and Swiss markets
• Focused product range and extension of Valora’s outlet portfolio ideally complement the Group’s retail formats in Germany and Switzerland
• Current owner’s assumption of anchor shareholder role ensures long-term commitment to Valora – seat on Valora Board planned
• Focus on „Valora for a fast moving world“ approach, enhancing the Group’s retail profile and sustainably increasing the profitability of the network of more than 3,000 outlets it now operates in four countries

Through its acquisition of Ditsch Brezelbäckerei GmbH and Brezelkönig GmbH & Co KG, Valora has gained an additional small-outlet-retail format with a network of 230 sites in Germany and Switzerland. This company, which has been family-owned and family-managed for three generations, generates annual sales of some CHF 190 million, on which it earns a highly profitable EBIT margin of more than 14 percent and an EBITDA margin of some 20 percent. For Valora, the firm’s integrated business model - based on the production and distribution of lye-bread bakery products and an outstanding network of outlets operated by agent-managers – provides an ideal opportunity to enter into the attractive and rapidly expanding immediate-consumption food product market. The nationwide coverage arising from the firm’s 195 Ditsch outlets in Germany and the strong brand recognition achieved by its 35 Brezelkönig sites in Switzerland provide significant scope for further expansion. Both parties have agreed that the purchase price will remain confidential (7-9x EBITDA multiple).

Valora’s Board commissioned a recognised, independent firm of auditors to evaluate the terms of the transaction, which this firm has assessed as being fair and appropriate.

A portion of the consideration, amounting to some CHF 100 million, will be paid in Valora shares. To that end, Valora will issue 635,000 new shares of authorised share capital to the vendor, Peter Ditsch. Once the transaction is complete, this will result in Peter Ditsch becoming the anchor shareholder in Valora, with 18.5% of the company’s outstanding shares. Valora will finance the remainder of the purchase price by drawing on a new CHF 450 million syndicated loan facility, which will replace its current CHF 300 million arrangement. The divestments Valora has already announced - the Handelshaus building in Muttenz and Valora Services Austria – will provide the Group with additional financial headroom. Completion of the transaction requires approval by the Bundeskartellamt, Germany’s independent competition authority, which is expected during the fourth quarter of 2012.