SCHMID Group to List on NYSE through Business Combination with Pegasus Digital Mobility Acquisition Corp.

Gebr. SCHMID GmbH, a global solutions provider for the high-tech electronic, photovoltaics, glass, and energy systems industries, and Pegasus Digital Mobility Acquisition Corp. (Pegasus), a special purpose acquisition company formed by StratCap, LLC announced a definitive business combination agreement that would result in the SCHMID Group becoming a publicly listed company on the New York Stock Exchange (NYSE), expected in the fourth quarter of 2023.

Founded in 1864 and headquartered in Germany, the SCHMID Group operates an extensive global footprint with manufacturing and sales/service locations in China, South Korea, Malaysia, Taiwan, and the U.S. The Group’s more than 800 employees worldwide include a large, diversified team of scientists, developers and engineers with deep domain expertise in production solutions for high-volume manufacturing.

The Group specializes in designing customized equipment and processes to build, connect and structure active layers in high-tech applications. Its business model is centered on collaborative research and development (R&D) with large original equipment manufacturers (OEMs), customized high-tech machines with an emphasis on green production technologies, and comprehensive on-site services for customers. Notably, the Group’s new Embedded Trace (ET) product line revolutionizes PCB and substrate manufacturing by enabling higher densities and other technological advances, while dramatically lowering the use of consumables – providing greener manufacturing at lower costs.

Christian Schmid, CEO and Chairman of the SCHMID Group, commented, “SCHMID has long been a pioneer in the technology industry with differentiated leadership positions serving a diverse range of high-growth verticals. The expertise of our team along with the depth of our patents and customer base have empowered our growth and presented many compelling opportunities. Becoming an NYSE-listed company will further strengthen our position as a sought-after global solutions provider, while accelerating our growth trajectory and innovation for the benefit of all stakeholders.”

Sir Ralf Speth, CEO and Chairman of Pegasus, added, “We are excited to partner with the SCHMID team to further grow the Group’s platform and accelerate expansion into new attractive markets, including the automotive sector. We look forward to bringing to bear our deep experience in product development, manufacturing, and operational excellence, as well as our track record of enhancing shareholder value, to realize the SCHMID Group’s full potential.”

SCHMID GROUP’s Strong Financial Profile & Compelling Growth Outlook

• High-growth, profitable, free cash flow positive business model, capable of self-sustainable funding of organic growth plan.
• Strong sales growth, driven by secular demand from top global technology firms          .
• Robust year-to-date revenue growth driven by relationships with customers that include some of the largest, global blue-chip Tier 1 technology brands.
• Substantial order book supports sustainable growth momentum for 2023 and beyond.       
• Premium product with stellar unit economics and increasing scale benefits, generating industry-leading EBITDA margins.

Well-Positioned in Large and Growing Markets

The SCHMID Group maintains a differentiated position within its end markets due to its premium product and pricing, growing scale efficiencies, and expansion potential due to customer and sector trends (the market estimates are based on the Company's own analysis using third-party data from a leading international consultancy):

• Within this TAM, SCHMID’s serviceable product markets are focused on high-end PCB/substrate production technologies, such as mSAP/SAP and Embedded Traces, which are forecasted to grow at approximately 38% CAGR from 2022 to 2026 (according to company estimates).

- Strong growth opportunities within high-end PCB/substrate production technologies from mobile devices, increasing connectivity/IoT (Internet of Things) requirements, and evolving demand from the automotive industry.

- Active within the market for photovoltaic production equipment, which has a total 2022  TAM of approximately $6.2 billion (according to company estimates; EUR to USD FX rate of 1.07 as of 29 May 2023):

• Within this TAM, SCHMID’s serviceable product markets are primarily focused on providing wet processing production solutions for mono-crystalline silicon and thin film PV, which are forecasted to grow at approximately 6% CAGR from 2022 to 2026 (according to company estimates).

Transaction Overview

Upon completion of the transaction contemplated by the Business Combination Agreement, the combined company’s ordinary shares will be listed on the New York Stock Exchange. The transaction values SCHMID at an enterprise value of USD 640 million.

The transaction has been unanimously approved by the board of directors of Pegasus and the shareholders of SCHMID and is expected  to  be  completed  in  the  fourth  quarter  of  2023, subject to the approval of Pegasus’ shareholders and the satisfaction or the waiver of other closing conditions specified in the Business Combination Agreement.

Management & Governance Details

Christian Schmid and Anette Schmid are expected to continue to hold a majority stake of the issued and outstanding equity of the combined company post-close, underscoring their continued confidence in SCHMID’s growth strategy and outlook.

The combined company’s board of directors is expected to include Christian Schmid and Anette Schmid as well as Sir Ralf Speth and Dr. Stefan Berger, in addition to three independent board members.

Following the transaction, the combined company is expected to be renamed “SCHMID Group N.V.” and will remain headquartered in Freudenstadt, Germany. SCHMID’s current management and employees are expected to continue in their respective roles as part of the combined company.

Additional information on the proposed business combination, including a copy of the transaction agreement will be provided in a Current Report on Form 8-K, to be filed by Pegasus with the U.S. Securities and Exchange Commission.

Advisors

Solomon Partners Securities, LLC is serving as financial advisor to Pegasus Digital Mobility Acquisition Corp. on the transaction. Marshall & Stevens Transaction Advisory Services LLC is acting as the fairness opinion provider to the board of directors of Pegasus Digital Mobility Acquisition Corp.

Clifford Chance is acting as U.S., German and international legal counsel to Pegasus, and Appleby is acting as Cayman counsel to Pegasus. Gleiss Lutz and Fenwick & West are advising SCHMID as legal counsel.