Coats Group PLC (LSE:COA), the industrial thread manufacturer, announced the acquisition of footwear solutions provider Texon International Group Ltd for an enterprise value of US$237mln (£198mln).
Texon has operations in Asia and Europe, where it supplies structural components to the global footwear market, Coats said in a statement.
“The acquisition of Texon will strengthen our existing presence in the highly attractive athleisure footwear market. The business is complementary to Coats and provides attractive future commercial opportunities as we work together leveraging our combined expertise and knowledge to succeed with our customers,” said Rajiv Sharma, the chief executive of Coats.
Coats highlighted Texon’s focus on sustainability; the company is targeting zero-waste by 2025 with its broad suite of sustainable products.
“We recognise and share Texon's focus on sustainability and innovation and believe that this acquisition strengthens our ability to fulfil these shared ambitions," said Sharma.
Coats has agreed to pay an enterprise value of US$237mln and a total net cash consideration of US$211mln after deducting assumed retirement liabilities and other customary adjustments.
It expects the acquisition to be earnings enhancing in the first year and to generate annual synergies of around US$5mln by the end of the second full year of ownership.
Texon recorded revenue of US$132mln and EBITDA of US$21mln in 2021.