Low & Bonar (L&B) announced plans earlier this year to buy nonwoven textile maker, Colbond Investments, according to the Reuters news agency. Colbond Inc., the textile manufacturer that grew out of the original American Enka, was purchased by the British company, which said it plans to invest in the plant.
L&B, a London-based conglomerate, paid €103 million (about $132.5 million U.S.) for Colbond. L&B said it plans to invest about $7 million in the Enka, N.C. plant during the next 12 to 18 months, increasing production that could mean more jobs, according to Bart Austin, president of Colbond Inc.
The deal also intended to raise $80.1 million in a rights issue. L&B said the proceeds from the $80.1 million, 1-for-2 rights issue would be used to repay part of the new debt facilities of $259.1 million it had arranged to fund the purchase; and further, said it was proposing to buy Colbond on a cash-free and debt-free basis.
No cutbacks in staff or senior management are planned for now, Austin said. Colbond Inc. will continue to operate as an independent business within L&B’s yarn and fabric division. Colbond has 600 employees worldwide, including 200 at the Enka plant, producing industrial textiles, such as the backing for artificial turf and automotive carpets, as well as silt-fence netting and erosion-control fencing found on construction sites.
The firm grew out of a British flooring company and a Belgian fabric firm, and it has factories in Western Europe and partnerships in China. L&B has sold off plastics and packaging divisions in recent years to focus on technical textiles found in artificial turf and other products. The company sold its plastics unit last year to Icelandic investment firm Atorka Group for $48.1 million to focus on the higher-margin floors and yarns/fabrics divisions.
L&B, which also has operations in China, France, and Germany, said that for year-end, December 2005, Colbond made a pretax profit of $19.5 million on sales of $266.6 million.