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Glatfelter to buy airlaid non-wovens producer Concert

06
Jan '10
Glatfelter announced that it has signed a definitive agreement to purchase Concert Industries Corp. (“Concert”) from Brookfield Special Situations Management Limited, an affiliate of Brookfield Asset Management Inc for Canadian $246.5 million (U.S.$235 million).

Concert is a leading global supplier of highly absorbent cellulose-based airlaid non-woven materials, used to manufacture a diverse range of consumer and industrial products for growing global end-use markets, including feminine hygiene and adult incontinence products, specialty wipes and food pads. Approximately 80% of Concert's sales come from the feminine hygiene market, which is expected to grow at a compound annual growth rate of approximately 5% for the next four years.

In 2009, Concert's revenues are estimated at approximately C$233 million (U.S.$203 million) and Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) is estimated to be approximately C$29 million (U.S.$25 million). Glatfelter expects the acquisition to be modestly accretive in 2010 and to be $0.20 to $0.25 per share accretive in 2011. Concert employs about 600 people at its two state-of-the-art facilities in Gatineau, Quebec, Canada and Falkenhagen, Brandenburg, Germany. In response to rapidly increasing customer demand, Concert recently invested approximately $70 million to install a new line at its Falkenhagen facility which increased annual rated capacity by 18,000 metric tons to a total of 84,000 metric tons. The new line successfully commenced commercial production during the fourth quarter of 2009, and is expected to ramp up significantly in 2010-2011 period.

“We view Concert as a natural fit for our business and right in line with our growth strategy,” said George H. Glatfelter II, Chairman and Chief Executive Officer of Glatfelter. “This acquisition will combine the strengths of two highly-regarded specialty producers and provide us with another industry-leading global business that sells highly specialized, engineered fiber-based products to niche markets with substantial barriers to entry. Concert participates in markets that are adjacent to markets we currently serve. It utilizes technologies that are familiar to us and broadens our relationship with premier global consumer products companies. In addition, Concert will create additional growth opportunities globally for Glatfelter, particularly in developing markets such as Asia, Central and Eastern Europe and South America.”

Founded in 1993, Concert is a recognized technology and product innovation leader in technically demanding segments of the airlaid market, most notably feminine hygiene, with the majority of its production technology and equipment being less than 10 years old. Its customers include blue-chip, multinational consumer product companies such as The Procter & Gamble Company, Johnson & Johnson, SCA and Kimberly-Clark.

“The acquisition of Concert affords us the opportunity to grow with the industry leaders in feminine hygiene and adult incontinence,” Mr. Glatfelter said. “Like Glatfelter's existing business units, Concert holds leading market share positions in the markets it serves, excels in building long-term customer relationships through superior quality and customer service programs, and has a well-earned reputation for innovation and its ability to quickly bring new products to market.”


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