On February 26th 2016, Komax Holding AG disclosed VERAISON SICAV’s agenda item for the AGM on May 12th 2016, in which VERAISON proposed that the Board of Directors be reinforced with two experienced and financial professionals. On March 14th 2016, Komax announced the signing of its sale agreement for Komax Medtech. A few days thereafter, the Board of Komax communicated that it rejects the proposal of VERAISON. Komax made the argument that there was no short-term need for a significantly larger Board of Directors due to the recent divestments of the Solar business and Komax Medtech and the simplification of the structure of the company. We understand and acknowledge this point and have therefore decided to appropriately adjust our proposal for reinforcement of the Board. We therefore now recommend to shareholders that they only elect Andreas Herzog, CFO of the Bühler Group, to the Board of Komax.
With the election of Andreas Herzog, the Komax Board will be significantly strengthened in key topics around capital allocation, generating scale effects, and the post-merger integration of acquired companies. We estimate that even after accounting for the sale proceeds from Medtech, Komax has lost a nearly triple-digit million Swiss Franc amount in shareholder value through its acquisitions outside of the core Wire business. We welcome the new strategy of focusing on the Wire business and only acquiring smaller adjacencies along the Wire value chain. We caution, however, that even the acquisition of small adjacencies and the expansion into new customer segments such as Aerospace, Telecom, or Industrial will require best-in-class expertise in capital allocation, the generating of scale effects, and post-merger integration, all of which Andreas Herzog brings to the table.
VERAISON is convinced that improved cost control will enable Komax Wire to further increase its profitability and aim for new financial targets. VERAISON reiterates its position that a reinforced Board will provide the necessary complementarity to fully develop a global company like Komax. We are generally pleased with our constructive exchanges on strategic issues up until now. However, we take issue with the fact that the Komax Board refused to interview or even contact our highly-qualified candidates, despite our initial recommendation nearly six months ago and numerous follow-up requests. We additionally regret that the Board of Directors chose to omit from its AGM invitation any mention of VERAISON’s explanations or reasoning for its agenda items, despite our explicit request to do so.
Komax Holding AG is a public company owned by its shareholders. As the largest shareholder of Komax with around 6% of its capital, we call on the Board to let all shareholders decide in a fair and transparent manner whether a reinforcement of the Board of Directors with an experienced financial professional is in the best interest of the company.