According to the company, the transaction, which is expected to close in the end of the year, will further position Lydall as a leader in needle punch nonwoven filtration solutions and strengthen its position as a premier provider of engineered technical materials. The acquisition will also expand the company’s filtration product offerings into attractive adjacencies and diversify the company's geographic revenue base.

“I am very excited for Gutsche to become a part of the growing Lydall organization. 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,” commented Michael Gutsche, CEO of Gutsche.

Combining expertise

Gutsche is a leading producer of nonwoven needle punch materials serving the industrial filtration and high performance nonwoven segments. The business consists of operations in Germany and China. Gutsche’s fiscal year ends on 31 December 2016, and revenue and EBITDA are forecasted by Gutsche to be approximately US$ 50 million and US$ 6 million, respectively. Lydall expects the business to be fully integrated by the end of 2019. The company intends to leverage its operating discipline, business efficiencies, and economies of scale to generate annual cost savings of around US$ 3 million.

“The acquisition of Gutsche is very appealing as it combines two complementary companies in the industrial filtration and technical materials markets. 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,” commented Dale G. Barnhart, Lydall’s President and CEO.

“In addition, we are able to complement our China-based sales with a focus on the greater Asia-Pacific export markets. Gutsche is a well-known leading brand in the industry with an excellent reputation for high quality products and a proven culture of innovation. We look forward to welcoming their employees to the Lydall family.”

Integration and manufacturing

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.

www.lydall.com