Lydall Buys Technical Materials Company Texel For $96 Mln In Cash

(RTTNews) - Lydall Inc (LDL), an industrial machinery manufacturer, announced Friday that it has acquired Texel, a division of ADS, Inc., for approximately $96 million in cash.

The company said the deal strengthens its position as a provider of filtration and engineered materials and expands the Company's end markets into attractive adjacencies.

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 second-quarter results will include less than $2 million of expenses related to strategic initiatives.

Texel is a producer of non-woven needle punch materials serving the geosynthetic, liquid filtration, and other industrial segments. The acquired business has 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.

Lydall expects to integrate the business fully by 2018, and expects to leverage its operating discipline, business efficiencies, and economies of scale to generate estimated annual cost savings of approximately $2 million.

The acquisition will be included in Lydall's Industrial Filtration operating segment which will be renamed Technical Nonwovens.

These savings are not contingent upon anticipated revenue growth of approximately 5 percent per annum.

The acquisition was financed through a combination of cash on hand and $85 million of borrowings from the Company's amended revolving credit facility.