With production facilities in Germany and China, Gutsche's key markets include industrial filtration and high performance nonwoven segments. Its 2016 are expected to reach $50 million.

"Our two companies could not fit together better," says Dale Barnhart, Lydall CEO. "With our combined organizations, I am confident we will be able to provide superior value and services for our customer while creating value for our shareholders."

The acquisition will be integrated into Lydall’s Technical Nonwovens segment, which contains two divisions—industrial filtration and advanced nonwovens. Lydall created the Technical Nonwovens segment in July when it announced the acquisition of Texel, a Canadian needlepunch manufacturer. The Texel business, which includes needlepunch nonwovens for filtration, geotextile and other technical areas, falls within the Advanced Nonwovens business, while Lydall's industrial filtration division, includes the business acquired from Andrew Industries in 2014. Both of these  acquisitions expanded Lydall's scope into new markets and geographies.

While there are a number of synergies between Lydall and Gutsche—particularly in industrial filtration—the acquisition gives Lydall better access to the growing waste to incinerator filtration markaet, which comprises about 50% of filter sales. Meanwhile, about 20% of the acquired business falls outside of filtration in markets such as fiber block for transportation, heat protection, automotives and acoustic roll goods.

"The advanced materials business provides us with products and markets that are attractive to us as we tried to diverse our offerings in the nonwovens segment," Barnhart says. This diversification strategy was also proven through the Texel acquisition. About 50% of this company's sales were in the geosynthetics market.

In addition to new market access, the acquisition provides Lydall with manufacturing sites in Germany and China, establishing Lydall with its first manufacturing presence in mainland Europe. Up until now, Lydall has been serving the greater European market from sites in U.K., which has presented challenges related logistics and currencies. Meanwhile,  Gutcshe's Chinese operations provide better access to the attractive Asia-Pacific markets, which have been underserved by Lydall's legacy business, according to Barnhardt. Currently, about 75% of Gutsche's sales are in the EMEA region, while about 20% are conducted in the Asia-Pacific region.

Michael Gutsche, CEO of Gutsche, comments, “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.”

Barnhardt told analysts that the technical nonwovens segment will spend the next 12 to 18 months focusing on the integration of Texel and Gutsche. However, further acquisition is not off the table.

"If the right opportunity comes up we will certainly pursue it but it may be in areas other than technical nonwovens," he says. "We certainly have the balance sheet to do it."