Mettler-Toledo is a leading global supplier of precision instruments.
The Company is the world’s largest manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. In addition,the Company holds one of the top three market positions in several related analytical instruments such as titrators, thermal analysis systems, pH meters,automatic lab reactors and electrodes.
Through its recent acquisition of Safeline, the Company is also the world’s largest manufacturer and marketer of metal detection systems for companies that produce and package goods in the food processing, pharmaceutical, cosmetics, chemicals and other industries. The Company focuses on high value-added segments of its markets by providing innovative instruments, by integrating these instruments into application-specific solutions for customers, and by facilitating the processing of data gathered by its instruments and the transfer of this data to customers’ management information systems. Mettler-Toledo services a worldwide customer base through its own sales and service organization and has a global manufacturing presence in Europe, the United States and Asia. The Company generated pro forma 1996 net sales of $889.6 million (giving effect to the Safeline Acquisition) which were derived 49% in Europe, 40% in North and South America and 11% in Asia and other markets.
The Company traces its roots to the invention of the single-pan analytical balance by Dr. Erhard Mettler and the formation of Mettler Instruments AG (‘Mettler’) in 1945. During the 1970s and 1980s, Mettler expanded from laboratory balances into industrial and food retailing products, and it introduced the first fully electronic precision balance in 1973. The Toledo Scale Company (‘Toledo Scale’) was founded in 1901 and developed a leading
market position in the industrial weighing market in the United States.
During the 1970s, Toledo Scale expanded into the food retailing market. Following the 1989 acquisition of Toledo Scale by Mettler, the name of the Company was changed to Mettler-Toledo to reflect the combined strengths of the two companies and to capitalize on their historic reputations for quality and innovation. During the past 15 years, the Company has grown through other acquisitions that complemented the Company’s existing geographic markets and products. In 1986, Mettler acquired the Ingold Group of companies, manufacturers of electrodes, and Garvens Kontrollwaagen AG, a maker of dynamic checkweighers. Toledo Scaleacquired Hi-Speed Checkweigher Co., in 1981. In 1990, the Company acquired Ohaus Corporation, a manufacturer of laboratory balances.
The Company believes that it maintains a leading position in each of its markets. In the weighing instruments market, Mettler-Toledo is the only company to offer products for laboratory, industrial and food retailing applications throughout the world and believes that it holds a market share more than two times greater than that of its nearest competitor.
The Company believes that in 1996 it had an approximate 40% market share of the global market for laboratory balances including the largest market share in each of Europe, the United States and Asia (excluding Japan), and the number two position in Japan. In the industrial and food retailing markets, the Company believes it has the largestmarket share in Europe and the United States.
In Asia, Mettler-Toledo has substantial, rapidly growing industrial and food retailing businesses supported by an established manufacturing presence in China. The Company also holds one of the top three global market positions in several analytical instruments such as titrators, thermal analysis systems, electrodes, pH meters and automatic lab reactors. The Company recently enhanced its leading positions in precision instruments through the addition of Safeline’s market leading metal detection products, which can be used in conjunction with the Company’s checkweighing instruments for important quality and safety checks in the food processing, pharmaceutical, cosmetics, chemicals and other industries.
Mettler-Toledo attributes its worldwide market leadership positions to the following competitive strengths:
Global Brand and Reputation
The Mettler-Toledo brand name is identified worldwide with accuracy, reliability and innovation. Customers value these characteristics because precision instruments, particularly weighing and analytical instruments, significantly impact customers’ product quality,productivity, costs and regulatory compliance.
Furthermore, precision instruments generally constitute a small percentage of customers’ aggregate expenditures. As a result, the Company believes customers tend to emphasize accuracy, product reliability, technical innovation, service quality, reputation and past experience with a manufacturer’s products when making their purchasing decisions for weighing and other precision instruments and experience high switching costs if they attempt to change vendors.
A recent independent survey concluded that ‘Mettler-Toledo’ was one of the three most recognized brand names in the laboratory.
The Company’s brand name is so well recognized that laboratory balances are often generically referred to as ‘Mettlers.’ The strength of this brand name has allowed the Company to successfully extend its laboratory product line to include titrators, thermal analysis systems,electrodes, pH meters and automatic lab reactors.
Mettler-Toledo has a long and successful track record of innovation, as demonstrated by the invention of the single-pan analytical balance in 1945 and the introduction of the first fully electronic precision balance in 1973.
The Company has continued to be at the forefront of technology with recent innovations in both weighing and related instrumentation,including its new digital load cell, its ID 20 terminal (the first personal computer interface to be certified by weights and measures regulators), its Brickstone weighing sensor technology, its GOBI moisture determination instrument, a new automatic lab reactor, the Zero Metal-Free Zone metal detector and its new PILAR (Parallel Infrared Laser Array) dimensioning equipment.
As with many of the Company’s recent innovations, the Company’s new Brickstone weighing sensor technology provides greater accuracy while also significantly reducing manufacturing costs and the time and expense of design changes by reducing from approximately 100 to approximately 50 the number of parts in the sensor.
The Company believes it is the global leader in its industry in providing innovative instruments, in integrating its instruments into application-specific solutions for customers, and in facilitating the processing of data gathered by its instruments and the transfer of this data to customers’ management information systems. Mettler-Toledo’s technological innovation efforts benefit from the Company’s manufacturing expertise in sensor technology,precision machining and electronics, as well as its strength in software development.
Comprehensive, High Quality Product Range
Mettler-Toledo manufactures a more comprehensive range of weighing instruments than any of its competitors.
The Company’s broad product line addresses a wide range of weighing applications across and within many industries and regions. Furthermore, the Company’s analytical instruments and metal detection systems complement its weighing products, enabling the Company to offer integrated solutions.
The Company manufactures its products in its modern manufacturing facilities, most of which are ISO 9001 certified. Mettler-Toledo’s broad range of high quality products and the ability to provide integrated solutions allows the Company to leverage its sales and service organization, product development activities and manufacturing and distribution capabilities.
Global Sales and Service
The Company has the only global sales and service organization among weighing instruments manufacturers. At September 30, 1997, this organization consisted of approximately 3,000 employees organized into locally-based, customer-focused groups that provide prompt service and support to the Company’s customers and distributors in virtually all major markets around the world. The local focus of the Company’s sales and service organization enables the Company to provide timely, responsive support to customers worldwide and provides feedback for manufacturing and product development. This global infrastructure also allows the Company to capitalize on growth opportunities in emerging markets.
Largest Installed Base
The Company believes that it has the largest installed base of weighing instruments in the world. From this installed base, the Company obtains service contracts which provide a strong,stable source of recurring service revenue. Service revenue represented approximately 17% of net sales in 1996, of which approximately 8% is derived from service contracts and repairs with the remainder derived from the sale of spare parts.
The Company believes that its installed base of weighing instruments represents a competitive advantage with respect to repeat purchases and purchases of related analytical instruments and metal detection systems,because customers tend to remain with an existing supplier that can provide accurate and reliable products and related services. In addition, switching to a new instrument supplier entails additional costs to the customer for training,spare parts, service and systems integration requirements. Close relationships and frequent contact with its broad customer base also provide the Company with sales leads and new product and application ideas.
Geographical, Product and Customer Diversification.
The Company’s revenue base is diversified by geographic region, product range and customer. The Company’s broad range of product offerings is utilized in many different industries, including, among others, chemicals, pharmaceuticals, food processing, food retailing and transportation.
The Company supplies customers in over 100 countries, and no one customer accounted for more than 2% of 1996 net sales. The Company’s diverse revenue base reduces its exposure to regional or industry-specific economic conditions, and its presence in many different geographic markets, product markets and industries enhances its attractiveness as a supplier to multinational customers.
Company Name METTLER TOLEDO INTERNATIONAL INC/
Company Address 1900 POLARIS PARKWAY
COLUMBUS, OH 43240
Company Phone 6144384511
Company Website www.mettlertoledo.com
CEO Robert F. Spoerry
Employees (as of 9/30/1997) 6800
State of Inc DE
Fiscal Year End 12/31
Status Priced (11/14/1997)
Proposed Symbol MTD
Exchange New York Stock Exchange
Share Price $14.00
Shares Offered 6,666,667
Offer Amount $93,333,338.00
Total Expenses $2,500,000.00
Shares Over Alloted 0
Shareholder Shares Offered —
Shares Outstanding 37,336,801
Lockup Period (days) 180
Lockup Expiration 5/13/1998
Quiet Period Expiration 12/9/1997
A note on emerging markets and competetors
The markets in which the Company operates are highly competitive. Because of the fragmented nature of certain of the Company’s weighing instruments markets, particularly the industrial and food retailing weighing instruments markets, both geographically and by application, the Company competes with numerous regional or specialized competitors, many of which are well-established in their markets. Some competitors are less leveraged than the Company and/or are divisions of larger companies with potentially greater financial and other resources than the Company. Although the Company believes that it has certain competitive advantages over its competitors, realizing and maintaining these advantages will require continued investment by the Company in research and development, sales and marketing and customer service and support. The Company has, from time to time, experienced price pressures from competitors in certain product lines and geographic markets. In the United States, the Company believes that the principal competitive factors in its markets on which purchasing decisions are made are accuracy and durability, while in Europe accuracy and service are the most important factors. In emerging markets, where there is greater demand for less sophisticated products, price is a more important factor than in developed markets. Competition in the United States laboratory market is also influenced by the presence of large distributors through which the Company and its competitors sell many of their products.
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Baseline Scales offers a comprehensive range of micro and semi micro balances , precision balances ,floor scales and bench scales suitable for any weighing environment and laboratory application.