Schweiter Technologies, which bought Satis Vacuum at the end of 1980's ago from Rudolf Suter (see article on him further below), has signed a letter of intent to acquire the German-based Loh Group. With Satis Vacuum controlling about 60 percent of the world market for lens coating machinery and Loh leading the market for spectacle lens surfacing equipment by a similar percentage, the combination of the two companies would create a single integrated provider of lens treatment equipment with major synergies in sales, marketing, distribution and customer service and simplified procedures for the customers.

The idea is to emphasize innovation and to combine sales forces in the various markets. Both Loh and Satis Vacuum have their own sales operations in North America, but Satis can help Loh in the UK and Loh can help Satis in France and Spain, for example.

The transaction was expected to close next Friday Oct. 1, depending on the results of due diligence proceedings, but it will likely slip to a later date in October. Attorneys feel that there is no need to worry about the anti-trust authorities, as the two companies operate in different fields.

Loh had revenues of 102 million Swiss francs (€66m-$54m) in 2003, says Schweiter, which is also involved in textile machinery and in equipment for the assembly of semiconductors, while Satis Vacuum generated sales of 65 million SF (€42m-$34m).

Eager to invest in high-technology manufacturing systems, Schweiter had reportedly looked at Loh already three years ago but decided to diversify into telecommunications, only to pull away a few months later because of the downturn in that market. Loh is owned by the family of Ernst Loh, who died ten years ago without leaving any heirs in executive positions.

Jürgen Wengert has been running Loh since 1995, apparently with a certain success, but he will leave the company after the takeover. Urs A. Meyer, who has been running Satis Vacuum since mid-2001, doubling its operating margin (Ebit) to 14 percent of sales, will be appointed as CEO of the expanded group. All the production sites of the two companies ? located in Milan, at Wetzlar in Germany and at Horgen and Oensingen in Switzerland - will be maintained, but the respective sales organizations will be merged. The restructuring of Loh's individual sites will be continued and process integration will occur wherever it may lead to improved productivity rates.

While Satis Vacuum is getting good response to a new lens coating technology developed together with Schott, the investment may help protect the it from new competition. One potentially strong new contender for the lens coating market is Singulus Technologies, a large German company specializing in coatings for CDs and DVDs which has recently set up a new lens coating division, run by Steffan Runkel.