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Low & Bonar acquires coated fabrics firm MTX Group

Dec '07
The specialist materials group Low & Bonar announces the proposed acquisition of MTX Group at a valuation of €166.0 million (approximately £119.4 million) on a cash-free and debt-free basis.

Acquisition highlights:
•MTX Group is a leading producer of technical coated fabrics with headquarters in Hückelhoven, Germany. Its members are wholly-owned subsidiaries of Mehler AG, a part of KAP Beteiligungs-AG. It produces premium materials for a variety of uses including, inter alia, side curtains for the transport market and fabrics for the architectural and print markets.
•For the financial year ended 31 December 2006, MTX Group reported consolidated EBITDA of €18.4 million (approximately £12.5 million) and EBIT of €14.6 million (approximately £9.9 million) on revenue of €133.1 million (approximately £90.5 million).
•The Acquisition represents another major step forward in pursuing Low & Bonar's growth strategy and is expected to reinforce the Company's position as a major international producer of industrial technical textiles. The Company also believes that consolidation opportunities within the technical coated fabrics market should offer further value creation potential.
•MTX Group's product focus is complementary to Low & Bonar's technical textiles business and there are likely to be cross-selling opportunities in the building and construction end-markets as a result of the Acquisition.
•The Company also believes that it can improve certain aspects of MTX Group's working capital management, increase its weaving and coating production efficiencies and enhance its innovation capabilities.
•Furthermore, the Company believes that there are likely to be opportunities for raw material cost savings and that the Acquisition would diversify further raw material purchases and reduce the seasonality of sales and profits for the Enlarged Group.
•The Acquisition is expected to be funded by a combination of existing and new financial resources. Low & Bonar currently has in place Existing Debt Facilities with in excess of £100 million of undrawn commitments and RBS and Bayerische Landesbank have agreed to provide a New Debt Facility of €90 million (approximately £64.7 million).
•The Board believes that the Acquisition will enhance the Company's earnings per Ordinary Share in the financial year ending 30 November 2008 (earnings per Ordinary Share stated before amortisation and non-recurring items).

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