Coats buys Gotex, Fast React for as much as $US45m
Gotex had 2015 sales of €14.2 million and operating profit of €2.2 million.
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Coats Group [NZX: COA], the UK-based thread-maker left after diversified investor Guinness Peat Group sold its other assets, is buying an industrial yarns business and a software company servicing the apparel industry for as much as much as $US45 million including earnouts.
Coats is acquiring Gotex, based near Barcelona, Spain, for an initial payment of $US28 million and a further $US4 million after two years, provided certain performance targets are met, the company said in a statement. Gotex makes "high-tech industrial yarns and tapes" used to protect, reinforce and insulate cables and pipes in the global telecommunications, energy, oil and gas sectors, and will strengthen Coats' presence in fibre optics, it said.
Gotex had 2015 sales of €14.2 million and operating profit of €2.2 million.
Coats is also buying Fast React, a Derby, UK-based provider of software and expertise to manufacturers and retailers of apparel and footwear, for an initial payment of $US9 million and further payments of up to $US4 million over three years contingent on performance targets. Fast React would expand Coats' range of productivity improvement tools after the acquisition in May 2015 of GSD Corporate, a UK-based company that supplies management systems in the sewn products sector, it said. GSD had 2014 revenue of $US2 million.
"Both businesses have delivered strong growth over recent years and we are confident this will continue under Coats ownership," chief executive Paul Forman said.
Last month Coats reiterated its guidance for a "modest" increase in annual earnings before one-time items and affirmed plans to delist from the NZX and the ASX and keep its London Stock Exchange listing.
Coats plans to delist from the NZX and ASX on June 24, after which all shares will automatically transfer to the UK main register.
Coats shares last traded at 61c on the NZX and have gained 15% this year.
(BusinessDesk)
Jonathan Underhill
Tue, 07 Jun 2016
Tue, 07 Jun 2016
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Coats buys Gotex, Fast React for as much as $US45m
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