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Disposal focuses L&B on high-margin technical textiles market
28
Jul '08
Low & Bonar, the specialist materials group, announces the proposed disposal of Bonar Floors, the Company's contract flooring business, to Forbo Holding AG at a valuation of £123.0 million on a cash-free and debt-free basis.

Highlights
• The Board believes that the price achieved for Bonar Floors represents good value for the Company and Shareholders.
• The Disposal focuses Low & Bonar exclusively on the fast-growing and high-margin technical textiles market in which the Company already enjoys a leading position.
• Following the Disposal, the Continuing Group will have increased funding capacity and management resource to pursue organic growth opportunities and strategic acquisitions in technical textiles.
• The Board is confident that the Disposal will help the Group to meet its long-term strategic objective of creating a leading global technical textiles business that will increase shareholder value.
• For the financial year ended 30 November 2007, Bonar Floors reported consolidated EBITDA of £13.9 million and EBIT of £11.7 million on revenue of £101.5 million.
• Following the payment of up to £8 million to the Company's Group Retirement Benefit Scheme, the net proceeds from the Disposal will be used to reduce the Group's borrowings.

Commenting on today's announcement, Paul Forman, Group Chief Executive of Low & Bonar, said:

“We are proud to have grown Bonar Floors into one of the leading European players in contract flooring. It is not easy to let go of part of our heritage but the Forbo offer presented the right opportunity for us to exit the contract flooring business and pursue a long-term strategy focusing on the higher-growth technical textiles market. The disposal delivers good value to our shareholders.

It also gives us the resources to focus exclusively on the significant opportunities – both organic and acquisitive – to grow our share of the fast-growing but highly fragmented market for technical textiles, building on the strong position we already enjoy. I believe that the synergistic combination between two of Europe's major flooring companies should deliver a higher growth business than either could achieve on a stand-alone basis.”

Duncan Clegg, Chairman of Low & Bonar, added:

“The Board is pleased to have reached agreement on the disposal of Bonar Floors, which will significantly strengthen our balance sheet and help concentrate our efforts on the long-term strategic objective of creating a leading global technical textiles business.”

Low & Bonar PLC

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