FREUDENBERG
Proposed acquisition of UK's Low & Bonar / Expansion of expertise in nonwovens
 The proposed acquisition would expand Freudenberg’s nonwovens business (Photo: Freudenberg) |
German technology group Freudenberg (Weinheim; www.freudenberg.com) has offered to buy UK specialist materials company Low & Bonar (London; www.lowandbonar.com) for GBP 107m (EUR 120m). Freudenberg said the acquisition would allow it to further expand its technical expertise in spunlaid nonwovens and open up new areas of activity.
Low & Bonar uses polymers such as polyethylene, polypropylene, polyester and polyamide to manufacture technical textiles for various applications in air and water filtration, building, roofing, drainage and erosion control, woven and non-woven geotextiles and construction fibres. The company has 11 production plants across Europe, Asia and North America, employing around 1,900 people and generating global sales of about GBP 350m. The deal remains subject to Low & Bonar shareholder approval as well as antitrust clearance.
Low & Bonar said it has been affected by difficult trading conditions in its end markets as well as increasingly intense competition in 2019, which has followed a challenging period in 2017-2018, when the company changed its chairman, CEO and chief financial officer and embarked on a turnover programme. The UK group said it expects heightened levels of uncertainty will continue to persist in the short term, which is making it more difficult to resolve its legacy issues and improve its financial performance. Consequently, Low & Bonar’s board said the acquisition by a larger and better capitalised group was an attractive strategic option.
Freudenberg said once the transaction has completed, it will commence a detailed review of how best to integrate and develop the two businesses. The review is expected to take three to six months and is likely to result in a reorganisation of certain central administrative functions where duplication exists.
The Germany-based group added that it intends to close Low & Bonar’s head office in London within 18-24 months of the deal’s closure and provide the necessary functions from its own offices in the UK or at its headquarters in Weinheim. No decision has been taken on any other Low & Bonar sites, but Freudenberg expects this to be part of the review process.
Low & Bonar uses polymers such as polyethylene, polypropylene, polyester and polyamide to manufacture technical textiles for various applications in air and water filtration, building, roofing, drainage and erosion control, woven and non-woven geotextiles and construction fibres. The company has 11 production plants across Europe, Asia and North America, employing around 1,900 people and generating global sales of about GBP 350m. The deal remains subject to Low & Bonar shareholder approval as well as antitrust clearance.
Low & Bonar said it has been affected by difficult trading conditions in its end markets as well as increasingly intense competition in 2019, which has followed a challenging period in 2017-2018, when the company changed its chairman, CEO and chief financial officer and embarked on a turnover programme. The UK group said it expects heightened levels of uncertainty will continue to persist in the short term, which is making it more difficult to resolve its legacy issues and improve its financial performance. Consequently, Low & Bonar’s board said the acquisition by a larger and better capitalised group was an attractive strategic option.
Freudenberg said once the transaction has completed, it will commence a detailed review of how best to integrate and develop the two businesses. The review is expected to take three to six months and is likely to result in a reorganisation of certain central administrative functions where duplication exists.
The Germany-based group added that it intends to close Low & Bonar’s head office in London within 18-24 months of the deal’s closure and provide the necessary functions from its own offices in the UK or at its headquarters in Weinheim. No decision has been taken on any other Low & Bonar sites, but Freudenberg expects this to be part of the review process.
08.10.2019 Plasteurope.com [243584-0]
Published on 08.10.2019
German version of this article...