Lydall executives told investors they hope to capitalize on Texel's strength in markets like liquid filtration and geosynthetics and grow these businesses in new geographical platforms following the acquisition of the Canadia company. Texel's sales are currently weighed heavily—about 95%,—in North America where they are split between the U.S. and Canada. Its largest market is geosynthetics, representing nearly 50% of total sales, and other important markets include the fast growing liquid filtration market and automotives.
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.
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."
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.