08-08-2017

Former business unit Performance Products (PP) sold: SGL Group signs agreement to sell its cathodes, furnace linings, and carbon electrodes (CFL/CE) business to Triton

- Enterprise value of 250 million euros agreed – translating into cash proceeds of more than 230 million euros
- Transaction expected to close in the fourth quarter of 2017
- Final discussions ongoing with US authority on merger clearance on the sale of the graphite electrode business to Showa Denko – closing could slip into the beginning of the fourth quarter 2017
- With these two transactions, the former business unit Performance Products (PP) has been sold at a total EV of 600 million euros and approx. 130 million euros above its book value on June 30, 2016

Wiesbaden, August 8, 2017. Today, SGL Group signed the sale and purchase agreement to sell its cathodes, furnace linings, and carbon electrodes (CFL/CE) business to funds advised by Triton (“Triton”). The two parties have agreed on an enterprise value (cash and debt free) of 250 million euros, which, after deduction of standard debt-like items (mainly pension provisions) as well as other customary adjustments, results in cash proceeds of more than 230 million euros. The final proceeds will be determined based on the balance sheet at closing. The transaction is subject to customary closing conditions, mainly relating to antitrust approvals. Closing is expected in the fourth quarter 2017.

Triton seeks to invest in and support the positive development of medium-sized businesses headquartered in Europe, focusing on businesses in the Industrial, Business Services and Consumer/Health sectors. The 31 companies currently in Triton's portfolio have combined sales of around 14.4 billion euros and around 89,000 employees.

Following the closing of the transaction, approximately 30 employees in Germany and 600 employees in Poland, who are based at the two production facilities in Nowy Sacz and Raciborz, will move from SGL Group to their new owner.

The sale will result in a book profit of approx. 130 million euros in the current fiscal year of SGL Group.

With regards to the closing of the sale of the graphite electrode business to Showa Denko, final discussions with the US authority on merger clearance are ongoing. The outcome of these discussions will not have any impact on the agreed enterprise value or the expected cash proceeds. Nevertheless, we cannot rule out, from today’s point of view, that closing may slip into the beginning of the fourth quarter 2017.

With this transaction, the former business unit Performance Products (PP) has been sold at a total Enterprise Value of 600 million euros and approx. 130 million euros above its book value on June 30, 2016, the date as of which the business was classified as held for sale.

As previously outlined, the proceeds from the sale of the former business unit PP together with the proceeds from the December 2016 rights issue will be used to redeem early the corporate bond with a nominal value of 250 million euros as well as repay at maturity in January 2018 the convertible bond with a nominal value of 240 million euros, thus reducing interest expenses, significantly lowering net debt and improving balance sheet ratios.

About the SGL Group – The Carbon Company

The SGL Group is a leading manufacturer worldwide of products and materials made from carbon. The extensive product portfolio ranges from carbon and graphite products, carbon fibers all the way through to composites. The SGL Group’s core expertise comprises the control of high-temperature technologies as well as the deployment of many years’ application and engineering know-how. This is used to exploit the company’s wide materials base. These carbon-based materials combine a number of unique material properties such as very good conductivity of electricity and heat, resistance to heat and corrosion as well as lightweight construction coupled with high firmness. The level of demand for the SGL Group’s high-performance materials and products is increasing due to the industrialization of the growth regions of Asia and Latin America and the ongoing substitution of traditional construction materials by new materials. The SGL Group’s products are deployed in the automotive and chemicals industries as well as in the semiconductor, solar, LED industry segments and in the field of lithium-ion batteries. Carbon-based materials and products are also used in wind energy, aviation and space travel as well as in the defense industry.

With 33 production locations in Europe, North America and Asia as well as a service network in over 100 countries, the SGL Group is an enterprise with a global orientation. In the 2016 financial year, approx. 4,000 employees generated 769.8 million euros in sales revenue. Its Head Office is based in Wiesbaden / Germany.

Important note:

To the extent that our press release contains forward-looking statements, the latter are based on information that is available at present and on our current forecasts and assumptions. Forward-looking statements, by their very nature, entail known as well as unknown risks and uncertainties that may lead to actual developments and events differing substantially from the forward-looking assessments. Forward-looking statements must not be understood to be guarantees. Instead, future developments and events depend on a large number of factors; they comprise various risks and imponderables and are based on assumptions that may possibly turn out not to be appropriate. These include unforeseeable changes to fundamental political, economic, legal and societal conditions, particularly in the context of our main customers’ industries, such as electric steelmaking, the competitive situation, interest and exchange rate trends, technological developments as well as other risks and uncertainties. We perceive additional risks e.g. in pricing developments, unforeseeable events in the environment of companies acquired and Group member companies as well as in current cost savings programs from time to time. The SGL Group assumes no obligation and does not intend to adjust or otherwise update these forward-looking statements either.

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