Coats completes acquisition of Texon

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Industrial yarn manufacturer Coats Group has completed the acquisition of Texon, a developer of structural component materials for footwear.

The acquisition, Coats said this week, will strengthen its position in the athletic shoe market.

Under the terms of the transaction, Coats agreed to pay an enterprise value of $237 million and a total net cash consideration of $211 million after deducting assumed pension liabilities and other customary adjustments.

Texon is a supplier of structural components, including heel counters, toe caps and insoles, for the footwear market. It is present in Asia and Europe.

Announcing the acquisition earlier this month, Rajiv Sharma, Managing Director of Coats Group, said: “The acquisition of Texon will strengthen our existing presence in the highly attractive sports footwear market. The business is complementary to Coats and offers attractive future business opportunities as we work together leveraging our combined expertise and knowledge to succeed with our customers. We recognize and share Texon’s focus on sustainability and innovation and believe this acquisition strengthens our ability to achieve these shared ambitions.

Coats expects the acquisition to improve earnings in the first year and generate annual synergies of approximately US$5 million by the end of the second full year of ownership.

Shares of Coats rose 0.5% to 66.90p apiece in London yesterday morning (July 21).

A Coats filing indicates that for the fiscal year ended Dec. 31, 2021, Texon generated revenue of US$132 million; EBITDA of $21 million; and adjusted operating income of $17 million.

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