Acquisition

RNS Number : 0048F

Filtrona plc

03 October 2008

 

3 October 2008

 

Filtrona plc (“Filtrona”), the international, market leading, speciality plastic and fibre products supplier, announces it has signed an agreement to acquire the business and assets of Lendell Manufacturing, Inc. (“Lendell”) based in St. Charles, Michigan, for a cash consideration of US$35m, payable at completion.

 

Lendell is a producer of speciality hydrophilic foam products for the medical, printing systems and personal care (cosmetics) markets and is highly complementary with Filtrona’s Bonded Fibre Components division. Both businesses design and produce products utilising capillary transfer science, supported by significant intellectual property and technological capabilities.  Approximately 55% of Lendell’s business is to the medical sector, primarily wound-care components and other foam applications, complementing the existing position held by Filtrona’s Bonded Fibre Components division in medical diagnostic components.

 

Lendell’s forecast 2008 earnings before interest, tax, depreciation and amortisation is US$4.2m after adding back certain non-recurring expenses. The acquisition is anticipated to be immediately earnings accretive for Filtrona. However, the beneficial impact of the acquisition in 2008 is expected to be offset by the effects of the current industrial action at Boeing, an important customer for the Plastic Profile and Sheet division, and a production interruption at the MSI facility in Houston caused by Hurricane Ike.

 

It is anticipated that significant synergy benefits will be generated by utilising Filtrona’s existing global manufacturing and commercial footprint to provide access globally for Lendell products within common served markets, such as medical and printer systems.

 

The acquisition is consistent with Filtrona’s strategy of focusing resources on the higher margin, higher growth potential areas of its business. As a result of this acquisition, the Bonded Fibre Components division is being renamed the Porous Technologies division and will include Lendell and Filtrona’s existing Fibertec business.

 

The consideration is subject to usual adjustments depending on the level of working capital within the business at completion and will be funded from existing debt facilities. Completion of the transaction is subject to certain administrative conditions and is expected later in October.

 

Commenting on today's announcement, Mark Harper, Chief Executive of Filtrona, said:

 

“The acquisition of Lendell is in line with our strategy of focusing acquisition resources on the higher margin, higher growth potential businesses, and will provide a significant enhancement to the capabilities within the newly named Porous Technologies division.

 

“We anticipate significant benefits from utilising our existing global manufacturing and commercial footprint to access new markets for Lendell products as well as from selling bonded fibre products to existing Lendell customers.”

 

Note for Class 2 purposes:

 

For the year ended 31 December 2007, Lendell’s profit before tax was US$1.7m, after charging non-recurring expenses relating to the previous shareholders, with gross assets at that date of US$8.9m.

 

 

 

Enquiries

 

Filtrona plc Mark Harper, Chief Executive Steve Crummett, Group Finance Director Tel: [phone]

Financial Dynamics             Richard Mountain                         Tel: [phone]

 

 

END

 

 

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