Lydall to acquire Interface Performance Materials for $265M in cash
Lydall announced it has entered into an agreement to acquire Interface Performance Materials for $265M in cash. The transaction will further advance Lydall's engineered materials offering in new markets with similar technologies utilized in our Performance Materials business. Interface is a leading globally-recognized brand that delivers complete sealing solutions with a comprehensive product portfolio, deep in-house technical capabilities and vertical integration. The transaction is expected to close in Q3, subject to the completion of specified closing conditions, including receipt of customary merger control approval from U.S. authorities. Interface's reported sales and adjusted EBITDA for the fiscal year ended December 31, 2017 were $142 million and $26 million, respectively. The business is expected to achieve sales of approximately $150 million and adjusted EBITDA of approximately $29 million in the trailing 12 months ending August 31, 2018. Lydall expects to leverage its business efficiencies, operating discipline and economies of scale to generate an estimated annual cost savings of approximately $4 million by 2020. The acquisition is expected to be accretive to Lydall's earnings, net of the effects of purchase accounting approximately six months after closing. Lydall's financial results for the Second Quarter 2018 included approximately $1.1 million of expenses related to this transaction, and it is estimated that approximately $3 million of additional non-recurring transaction and integration expenses will be incurred over the second half of 2018 and approximately $1 million in 2019. The Interface business will become part of the Performance Materials operating segment with the expectation to complete integration within one year of closing. The transaction is expected to be financed predominantly from borrowings under the company's amended credit facility; the provisions of which are being finalized with our banking partners.