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Lydall to acquire nonwoven materials firm MGF Gutsche

03 Dec '16

3 min read

Lydall, Inc., developer of specialty engineered products for the thermal/acoustical and filtration/separation markets, has announced that it has entered into an agreement to acquire MGF Gutsche GmbH & Co. KG, a leading producer of nonwoven needle punch materials serving the industrial filtration and high performance nonwoven segments, for around $58 million.

The transaction will further position Lydall as a global leader in needle punch nonwoven filtration solutions and strengthen the company's position as a premier provider of engineered technical materials. The acquisition will expand the company's filtration product offerings into attractive adjacencies and diversify the company's geographic revenue base.

The transaction is expected to close at year end, subject to receipt of customary merger control approval from German competition authorities and the completion of specified closing conditions.

Gutsche's fiscal year ends on December 31, 2016 and revenue and EBITDA are forecasted by Gutsche to be approximately $50 million and $6 million, respectively. Lydall expects the business to be fully integrated by the end of 2019. Lydall expects to leverage its operating discipline, business efficiencies, and economies of scale to generate annual cost savings of approximately $3 million.

The acquisition will be integrated into Lydall's technical nonwovens segment. The Company plans to maintain manufacturing presence in the UK, Europe, and China and, through restructuring initiatives, to increase efficiencies and unlock operational synergies. The acquisition will be dilutive to Lydall's earnings in 2017 on an all-in basis, which includes the effect of purchase accounting, restructuring and other non-recurring expenses. The acquisition is expected to be accretive to Lydall's earnings by mid-2018.

The transaction is expected to be financed through a combination of cash on hand, and with borrowings from the Company's revolving credit facility.

Dale G. Barnhart, Lydall's president and chief executive officer said, “With the addition of Gutsche, we gain an experienced management team and an attractive footprint to serve Europe as well as secure a strong filtration position in the fast growing waste-to-energy incineration market.”

Michael Gutsche, chief executive officer of Gutsche said, “We have found the ideal partner that shares our passion for delivering the most advanced and highest quality products in the industry. Our combined focus on profitable growth and the complementary nature of markets we serve will only further strengthen the excellent relationships we have with our suppliers and customers.” (GK)

Fibre2Fashion News Desk – India