“A Milestone Moment”
Merger of Wittur, Sematic creates elevator-industry powerhouse.
Dr. Walter Rohregger, CEO of Wittur, described the announcement over the summer that the owners of Sematic and Wittur had agreed to transfer controlling interest in Sematic to Wittur as “an important milestone in our group’s path.” Sematic Elevator Products CEO Dr. Stefano Socci said it is “a milestone moment” that will lead to increased opportunities globally. The deal, between Wittur owner Bain Capital and Sematic owners The Carlyle Group and the Zappa family, is expected to close this quarter or in the first quarter of 2016.
North America, where Sematic has what Wittur describes as “a good setup,” will be a particular focus of the new company.
A Wittur spokesman says it is too early to say whether redundancies and headcount reductions will occur, but he did say the fact that the company intends to grow implies there will actually be hiring in the long term. North America, where Sematic has what Wittur describes as “a good setup,” will be a particular focus, according to the announcement, which states:
“Through the merger with Sematic, Wittur will expand its product range and customer base and benefit from Sematic’s knowhow in the customized engineering segment. Wittur is also expected to take advantage of Sematic’s complementary international presence, notably including North America. The increased product diversification and the more balanced geographic footprint should, in turn, help Wittur in the more stable recurring aftermarket and modernization business. At the same time, Sematic is expected to benefit from Wittur’s extensive product range, effective sales network and customer access.”
Both Wittur and Sematic are leading elevator component suppliers, manufacturing and distributing everything from doors and related components to complete elevator systems. Installation and maintenance have not been a part of the companies’ business in the past, and that will continue to be the case with the combined entity. There will be no effect on existing Wittur and Sematic customers, the spokesman said.
The coming together of the two giants is the latest in the evolution of a pair of companies that trace their beginnings to a couple of young, gutsy entrepreneurs in 1968 near Munich, Germany, and in 1959 near Milan, Italy, respectively. After the precursor to Wittur was founded by Horst Wittur and the precursor to Sematic was founded by Francesco Zappa in the heady post-World War II years, the companies grew steadily throughout their existences, introducing new technologies and expanding their geographical reach through acquisitions and infrastructure investment. Both have always been known for their products’ quality and attention to detail.
They built themselves up to become what Wittur describes as “two of the leading R&D powerhouses in the industry.” In terms of R&D, best practices will now be shared, which promises to lead to even greater innovations. The spokesman elaborated on the joining of the companies’ R&D forces:
“Wittur today has several R&D centers around the world, partly with physical presences in a specific location, and partly with virtual teams, depending on the functions and where people are based. Sematic has a strong center in Osio Sotto, Italy. We will have to capitalize [on] the knowhow of the two entities. Localization is a minor issue due to the ability to work, using modern technology, in an integrated way, even if people are located in different geographical areas.”
In 2014, ownership of the companies shifted, with U.S.-based private equity group Bain agreeing to buy Wittur from private equity groups Triton and Capvis, and global asset manager The Carlyle Group agreeing to buy a majority stake in Sematic from the Zappa family. The new company will be based at Wittur headquarters in Wiedenzhausen, Germany, but Sematic will continue as a brand, with its own headquarters in Osio Sotto, the spokesman said.
The coming together of the two giants is the latest in the evolution of a pair of companies that trace their beginnings to a couple of young, gutsy entrepreneurs in 1968 near Munich, Germany, and in 1959 near Milan, Italy, respectively.
Its projected combined 2015 revenue will be approximately EUR750 million (US$840 million), and it will have roughly 4,400 employees – 3,300 from Wittur and more than 1,100 from Sematic. Rohregger will take the helm as CEO of the combined entity. Dr. Roberto Zappa will continue as a member of the new company’s supervisory board. Upon announcement of the deal, the financial terms of which are confidential, Rohregger stated:
“I am delighted that in very constructive discussions we have been able to articulate the value of both companies combining to create a leading global supplier to the elevator industry. Sematic has a long history and an outstanding reputation in the industry, a complementary product range and highly qualified people. Our increased diversification in terms of product range, geographic footprint and customer base will add to the resilience of our business model. With this important milestone in our group’s growth path, we are delivering on our value-creation strategy.”
Wittur has production facilities in 10 countries, Sematic in seven. The combined company will continue to supply customers from its pair of Indian production sites in Chennai and Pune. Wittur has a plant in Istanbul, “whereas Sematic does not have a production facility [there] yet,” the spokesman said. “We will determine how to optimize the service to our customers in both countries after the closing of the transaction.”
As for business drivers over the next five years, the company foresees increased demand for more-diverse and higher-quality products in light of stricter safety standards all over the world. The megatrends of population growth and urbanization, particularly in China, are also expected to generate business, along with “an increasingly larger and aging installed elevator base in regions like Europe and North America.”
Besides Rohregger and Roberto Zappa, other major players within the new company include Socci, who will become a member of the executive management team, and Dr. Michael Siefke, chairman of the board. Zappa, a prominent industry figure who is president of the Italian Lift Association and vice president of the European Lift Association, is a particularly welcome addition, Siefke stated. Expressing confidence in the combined entity’s future, Siefke said:
“Today, we open a new chapter in the history of Wittur and Sematic. We are absolutely convinced that the combined company will be better placed to meet our customers’ demand in the future by creating a truly global company with global reach and even broader and more flexible production. In particular, I am pleased Roberto Zappa will join the supervisory board, supporting us with his unique industry expertise and network.”