The document summarizes information about an Italian company that manufactures tube mills. It is a leading producer of equipment for stainless steel and titanium tubes and has recently expanded into the carbon steel tube market. The company has experienced strong growth over the past decade and is looking to double its production capacity and global sales within the next three years. Due to its success and future growth potential, the company's shareholders are seeking a partner to acquire the business to support its continued expansion internationally.

1. Arkios Italy
BLIND PROFILE – TUBE MILLS MANUFACTURER
Transaction Outline
The Target Company is an independent company controlled by a leading group located in Italy, operating
since 40 years in the engineering and production of complete lines and mills for the production of high
quality welded tubes. Due to the strong and fast expansion of the Company and the growing worldwide
order backlog, shareholders of the Target Company decided to appoint Arkios Italy in order to find a
partner interested in the acquisition of the Company, in order to support its future development and fully
exploit the opportunities of the market.
The Company
The Target closed 2010 with a turnover of 13mio euro of which 60% coming from foreign sales, with an
EBITDA margin of 2,2mio (17% on sales). Turnover (Euro Millions)
30,0
Since 2002, the Target, with a CAGR of +18%, didn’t have any
25,0
problem of growth and profitability.
20,0
The Company reorganized its market presence worldwide in
15,0
order to double its turnover in next 3 years and during 2011
invested in order to double its facilities and face the growing 10,0
order backlog.
5,0
Starting in the niche markets of stainless steel and titanium, the 0,0
company developed specific patented solutions and became the 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
leader of these markets.
New patents, research and solutions in order to expand the presence in the Carbon-Steel market in a
profitable way resulted in a unexpected and wide range of orders in the 2011 pipeline for over 27 mio
euros and an even more consistent base of negotiations (68 mio euros) limited by the production
capacity. This new scenario require a scale up of the management and internationalization of its presence.
The company has a deep penetration on the European market and
focusing also on emerging markets such us Asia, Russia and South
America. Geographic Sales Breakdown 2010
43,5% 40,2%
Carbon segment is starting to become an important area where in
the future the company foresee a wide range of diversification,
while stainless steel and titanium remain core competence and 16,4%
leadership niche market.
Thanks to a direct and complete knowledge of the tube
Italy UE Extra UE
manufacturing market and of all related problems, the Company is
able to manufacture custom-made equipment for its customers,
thus offering high technology, high quality, user-friendliness,
substantial reductions in manufacturing costs and times, and the
highest productivity. All new manufacturing equipment's are firstly
implemented in group companies that constitute a “live”
showroom for its solutions.

2. Arkios Italy
Detail of the “Extra UE”
The Company can also supply “turnkey” system, find custom- South
America; 0,4% Africa; 0,1%
Russia; 9,9%
made solutions, offer suggestions to upgrade old systems and Asia; 18,2%
provide a complete after-sales technical and personnel training
service.
The Target is working on an area of 26.000 sqm (286.000 sqft),
with 2 industrial building, one of 5.000 sqm (55.000 sqft) and Centre
another one of 7.400 sqm, all the facilities are owned by a America;
14,8%
company of the Group.
During the end of 2011 there will be the opening of a new industrial building to expanding the current
manufacturing area, for a new surface of 3.000 sqm and a total area of 5.000 sqm, with an investment of
2mio euro.
The international market
The steel pipe and tube manufacturing industry had to contend with some heated trading conditions over
the past five years. The industry's fortunes are largely dependent on the level of activity within the
construction (building and non-building) and automotive sectors, in addition to the prices of key inputs
such as raw and fabricated steel.
In an industry where the supply and demand curve can swing a firm from profit to loss within a fiscal year,
tube fabricators face continual pressure from supplier side steel prices, competitor side capacity and buyer
side quality demands. The environmental pressure from national and offshore competition, energy
availability and conservation impact the profit dynamic as well.
By its nature, the tube and pipe industry has always been fragmented, chaotic and unpredictable. The
market forces that shape it, have also forced the survivors to redefine it.
The industry has undergone mill maneuvers as firms with heavy coffers acquired or consolidated with
complimentary or competing fabricators. Companies have also closed plants to relocate their assets to
lower cost based countries.
With the jostling taking place, experienced mill operators may have been lost in the shuffle thereby
shrinking the experience pool. In mature markets the remaining players are in expansion. In the emerging
markets, new fabricators are coming online annually which is increasing the regions prominence for tube
fabrication on the world stage.
In the classic context of market forces producers have little bargaining power and therefore need to look to
technology to minimize risk.
Target Position on the Market
• Stainless Steel Tubes and Non-Ferrous Metal Tubes Market
Thanks to many years of experience in the stainless steel tube
production and after many years of research and investments in new
technologies, today the Target can actually be considered the first
company in the world in this market; it is the only one offering the
complete process with in house designed and built equipment and
tooling.
The Company has developed and is able to provide, contrary to its
competitors, all in line units required for high quality tube production
(such as bead rollers, bright annealing machines, brushing machines,
deburring machines, accumulators for laser mills, tooling, etc.).

3. Arkios Italy
Through its new process the Target is able to provide a method which brings undisputed
advantages in terms of flexibility, production capability and cost reduction.
The Target obtains plenty of trust from all main stainless steel tube producers in the world and
supplies the main producers of stainless steel exhaust tubes.
In the last years it has gained a lot of experience in production of special material tubes (titanium –
duplex – super duplex).
• Carbon Steel Tubes Market
The Target has decided in 2008 to expand the business in the carbon steel tube market. In four
years the company has already obtained great results on this field (especially in automotive
market) and expects in the future a large expansion of the market share thanks to the new recently
presented Patents . This new technology will allow the company to compete for bigger projects for
large diameters pipe mills.
Target presence World Wide
Russia
Turkey
Germany
France
Korea
NAFTA Italy
China
Thailand
India
South Africa
Brazil
Key Investment Highlights
Market
The Stainless Steel and Titanium market is a niche and specialized sector where the Target has a
role of leadership and represent the cash cow business unit;
Carbon market is fragmented and numbers related to tubes equipment is not disclosed formally;
for lower/cheap equipments companies in far east produce hundreds of plants while the Target is
entering the Carbon Market with an innovative approach and technological leadership with a great
appreciation by economic customers, so it doesn’t consider mass market players as competitors
but synergic, especially when this premium price segment will be developed in Carbon Steel
market;
International presence is recognized as an important asset in a market where the ability to
participate / win tender is a strategic asset. A new international management as to be hired, while
the entrepreneur warrantee its support in the change management.

4. Arkios Italy
Company
The Group has operated since 40 years in different compartments of tubes production and this
element allowed the Target to benefit of its 360° vision of the market;
Remarkable commercial presence in several countries and in the markets with higher growth
potential to be strengthen in next years;
Proved ability to participate / win both national and international tenders, pipeline for over 27 mio
euros and an even more consistent base of negotiations (68 mio euros at date);
The company enjoys total control of the technology employed in its tube mills, including
mechanical, electronic, and automation aspects despite competitors that often depend on third
parties patents to offer a turnkey solution ;
The expansion of the manufacturing area in the end of 2011 could give to the Company the
possibility of exploiting the great amount of outstanding orders;
The current patent portfolio of the Company is completely independent from third parts; this
results in a full independence in the business process.
To get further information about this transaction, please contact:
Paolo Pescetto Andrea Rossotti
CEO CFO
+39 334.66.54.116 +39 339.86.98.674
paolo.pescetto@arkios.it andrea.rossotti@arkios.it
www.arkios.it www.arkios.it