Posted July 18, 2016

 

MANCHESTER, Conn. – Publicly traded Lydall, Inc. announced that it has acquired Texel, a division of ADS, Inc., for approximately $96 million in cash.

 

The transaction strengthens Lydall’s position as an industry-leading, global provider of filtration and engineered materials and expands the company’s end markets into attractive adjacencies.

 

Texel is a leading producer of nonwoven needle punch materials serving the geosynthetic, liquid filtration and other industrial segments. The acquired business consists of three manufacturing operations and one distribution center located within the province of Quebec, Canada and has approximately 300 employees.

 

For Texel’s fiscal year ended January 31, 2016, revenue was approximately $72 million and adjusted EBITDA was approximately $12 million. The business is expected to be fully integrated by 2018, and Lydall expects to leverage its operating discipline, business efficiencies, and economies of scale to generate estimated annual cost savings of approximately $2 million. These savings are not contingent upon anticipated revenue growth of approximately 5 percent per annum.

 

The acquisition is expected to be accretive to Lydall’s earnings, net of the effect of purchase accounting, and accretive to cash flow from operating activities within 12 months. Lydall’s financial results for the second quarter 2016 will include less than $2 million of expenses related to strategic initiatives, and it is estimated that approximately $1 million of additional non-recurring transaction and integration expenses related to the acquisition will be incurred over the second half of 2016.

 

The acquisition will be included in Lydall’s Industrial Filtration operating segment, which will be renamed Technical Nonwovens. Each respective business will continue to approach the market and customers as they have prior to the combination given their respective strong brand recognition in the markets they serve.

 

The acquisition was financed through a combination of cash on hand and $85 million of borrowings from the company’s amended revolving credit facility, which was increased to $175 million. The amended facility provides additional capacity to support organic growth programs, fund capital investments and continue pursuits of attractive acquisitions that will drive profitable growth.

 

“The acquisition of Texel is highly complementary as it diversifies our filtration and engineered materials business into attractive adjacent markets while leveraging our existing manufacturing capabilities and know-how,” said Dale Barnhart, Lydall’s president and CEO. “Texel has a proven culture of innovation and development, and we are excited for their employees to join the Lydall family. Furthermore, the acquisition provides an important step toward our 2018 long-term vision for profitable growth and establishes Lydall as one of the world’s largest providers of nonwoven materials."

Lydall acquires nonwovens producer Texel