On Friday, Lydall announced it would purchase Texel, a maker of needlepunched nonwovens, from its parent company ADS for $96 million. The business, which reported sales of $72 million last year, will be integrated into Lydall’s industrial filtration business. The two businesses will be renamed technical nonwovens later this year but for reporting purposes Lydall will group the division sales into two categories—industrial filtration and advanced materials.
Calling Texel an “outstanding company” with a “strong management team and workforce, Lydall CEO Dale Barnhart said it was the complementary technologies—needlepunch nonwovens—between the two companies as well as Texel’s leadership position in several adjacent markets that drew the company to the acquisition. “We had been looking at Texel for a long time,” he says. “It was not an auction process. It was a negotiated deal.”
Lydall’s Industrial Filtration division also contains the business it acquired from Andrew Industries in 2014. Comprised of needlepunched nonwovens used nearly entirely in filter media bag applications, this business included manufacturing assets in the U.S., the U.K. and China. Like Andrew, Texel’s business comprises solely needlepunch nonwovens with three plants in Canada but its more diverse market presence was attractive to Lydall.
"The acquisition gives us the ability to take similar manufacturing proceses and leverage into growth markets like geotextiles and liquid filtration," says Scott Deakin, Lydall CFO. "We have available capacity in Europe and we see this as an opportunity to take our existing platforms and expand into new geographies with our existing assets."
The expected synergies between Lydall and Andrew have exceed expectations during the past two years, according to executives, acquisitions will continue to be on the radar for Lydall as it looks to grow into new markets and geographies. “We will do it in an orderly manner,” Barnhart says. “We are not going out with reckless abandon. As we did with Andrew, we found another great opportunity with Lydall.”
Andrew added about $130 million in annual sales to Lydall’s annual sales last year. The Manchester, CT-based company’s total sales were $357 million prior to the Texel acquisition. Executives expect topline growth for the company to be about 5% after the acquisition.