03/17/2008

Schuler creates solid financial base for growth

Capital increase of up to 3.5 million new preferred shares - Proceeds of € 35 million expected to bolster equity

The Board of Management and Supervisory Board of Schuler AG today resolved to issue up to 3.5 million new preferred shares from authorized capital at a subscription price of € 10 per share. This will provide the company with cash proceeds of around € 35 million.

The capital stock of Schuler AG amounting to € 45.5 million will be increased by up to € 9.1 million, to up to € 54.6 million, by issuing up to 3.5 million new no-par value preferred shares for cash contribution made out to the bearer and with full dividend rights for the fiscal year 2007/08. It is planned to offer the new no-par value preferred shares to shareholders by means of an indirect subscription right in the ratio of 5 to 1. There will be no trading of subscription rights. Further details will be provided in the subscription offer, which is expected to be published on March 19, 2008. The new preferred shares are also to be converted to common shares, together with all other preferred shares, on approval of the next Annual Shareholders' Meeting on April 10, 2008.

In the run-up to this planned capital increase, Schuler AG made a firm agreement with Süddeutsche Beteiligung GmbH, Stuttgart, that the latter would acquire all new shares from the capital increase not subscribed by the existing shareholders. Schuler-Beteiligungen GmbH, which currently holds 100 percent of the common stock and thus 60 percent of the entire capital stock of Schuler, will transfer its subscription rights to the new investor in order to facilitate the latter’s entry into the company and provide a wider basis to the company’s shareholder structure. Following the conversion of preferred shares to common shares, Schuler-Beteiligungen GmbH will still have a majority holding in Schuler AG of over 50 percent.

Schuler has established a firm financial basis for the implementation of its growth strategy with the aid of this planned capital increase and an agreed syndicated loan amounting to € 450 million. Following the acquisition and swift integration of Müller Weingarten, which has been successfully completed just twelve months after announcement, the Schuler Group has broken into a new dimension which will enable it to tap additional growth potential. The global market leader in metalforming technology with annualized sales of over € 900 million is also planning to break through the one-billion-euro sales barrier within the next three years. The four main growth drivers are:

• innovative products resulting from greatly expanded engineering expertise
• even stronger presence in future markets of Asia and Eastern Europe
• further exploitation of supplier and non-automotive markets
• continued expansion of the successful service business

Jürgen Tonn, CEO of Schuler AG, states: “This combination of equity and debt finance enables us to meet an important requirement for the realization of future growth. The fact that a further long-term institutional investor is planning to acquire a stake in our company is confirmation of our strategy.”

This announcement does not constitute an offer for sale or subscription. Shareholders are requested to refer to the subscription offer which will be published in the next few days in the Electronic Federal Gazette, the FAZ and on the company’s website (http://www.schulergroup.com/).

About Süddeutsche Beteiligung GmbH

Süddeutsche Beteiligung GmbH is an independent investment company founded in 2007 consisting mainly of five renowned family offices and an institutional investor from the south of Germany. It is committed to long-term, entrepreneurial and partner-like equity solutions. Its main focus is on providing sustainable support for established, mainly family-owned mid-size companies and their shareholders in questions of growth financing, succession solutions and/or changes in ownership (including MBO/MBI).

The aim of Süddeutsche Beteiligung GmbH is to ensure improvement in the equity position of mid-size companies while preserving their independence and competitive standing, thus enabling sustained growth.