Von Roll

In 1991, Von Roll was a Swiss steel and engineering conglomerate active in a variety of segments, such as environmental engineering, steel mini-mills, electrical insulation materials, waste management and cast products. Over the years, Von Roll had developed into 14 operational divisions, many of which had very limited or no synergy with the other divisions. In addition, Von Roll was the largest land owner in Switzerland and had considerable real estate holdings. Due to an apparent lack of hands-on management and a collateral lack of shareholder influence, the company had drifted into a structure that made it difficult for the capital market to appreciate the value and the potential of its various divisions.

After an in-depth analysis, Proventus developed a strategy aimed at creating a ”Swiss steel” solution with Von Roll’s largest competitor. Strategic elements also included streamlining the remaining divisions and releasing inherent values.

During 1991, Proventus built a substantial shareholding in the Von Roll group. The share structure of the company included a significant amount of bearer shares which made it difficult for Proventus to gain absolute control. Due to this factor, combined with the lack of experience in active ownership in Switzerland, Proventus did not gain acceptance for its ideas from Von Roll’s management. Without the ability to change management and work actively through the board of directors, Proventus did not succeed in implementing its strategic plan.

As the requisite measures were not taken, Von Roll lacked the strength to handle adverse economic conditions that emerged in 1992. A few of Von Roll’s operating divisions were consuming virtually all resources. Proventus was then invited to participate in a restructuring to relieve the financially stressed situation, and safeguarded shareholder interests against creditors.

Having weathered the crisis, Proventus disposed of its final Von Roll shares in 1996, realizing a substantial loss. Von Roll is the only major failed investment in the otherwise successful track record of Proventus.

Even so, the actions of Proventus during Von Roll’s restructuring generated substantial goodwill in Switzerland and a Proventus representative was asked to continue to serve on the Von Roll board. This despite the fact that Proventus was no longer a shareholder.