York, Pennsylvania, USA, 05 January 2010 -- Glatfelter (NYSE: GLT), a global manufacturer of specialty papers and engineered paper products, today announced that it has signed a definitive agreement to purchase Concert Industries Corp. from Brookfield Special Situations Management Limited, an affiliate of Brookfield Asset Management Inc. (NYSE:BAM) for CAD 246.5 million (USD 235 million).
Concert is a leading global supplier of highly absorbent cellulose-based airlaid nonwoven 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.
For 2009, Concert’s estimated revenues were approximately CAD 233 million (USD 203 million) and earnings before Interest, taxes, depreciation, and amortization (EBITDA) were estimated to be approximately CAD 29 million (USD 25 million). Glatfelter expects the acquisition to be modestly accretive in 2010 and to be USD 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 installed a new production 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, cChairman 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,” 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.”
Glatfelter plans to finance the acquisition through a combination of cash on hand and debt. As of 30 November 2009, Glatfelter had a cash balance of USD 136 million and USD 194 million available under its revolving credit facility.
“We are pleased to have completed the repositioning of Concert Industries as a very profitable, leading airlaid manufacturer globally,” said Pierre McNeil, senior vice president, Brookfield Asset Management Inc. “We are also confident that Concert’s customers and employees will benefit substantially from the strategic direction that will be provided by Glatfelter.”
The proposed transaction, which is subject to customary closing conditions, including receipt of German regulatory approval, is expected to close by the end of the first quarter of 2010. Upon closing, Glatfelter plans to operate Concert as a third business unit along with Specialty Papers and Composite Fibers.
Credit Suisse acted as exclusive financial advisor and Shearman & Sterling LLP acted as legal advisor for Glatfelter. CIBC World Markets Inc. and HSBC Securities (Canada) Inc. acted as financial advisors and Goodmans LLP acted as legal advisor for Brookfield Special Situations Management Limited.
About Concert Industries Corp.
Concert Industries Corp. is a leading manufacturer of highly absorbent cellulose-based airlaid nonwoven materials. Superior service, quality, innovation and motivated employees are the foundation of Concerts’s operations. Concert’s airlaid technology is used for the production of a wide variety of hygienic items such as feminine sanitary napkins, adult incontinence products, specialty wipes, table top napkins and tablecloths, food pads, cosmetic pads, diapers, and panty liners. Additional information can be found at www.concert.de
About Brookfield Special Situations Management Limited
Brookfield Special Situations Management Limited was established by Brookfield Asset Management to provide a source of patient, long-term capital and strategic assistance to mid-market companies based in North America. .
Headquartered in York, Pennsylvania, Glatfelter is a global manufacturer of specialty papers and engineered products, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, Pennsylvania, and Chillicothe and Fremont, Ohio. International operations include facilities in Germany, France, the United Kingdom, and the Philippines, and a representative office in China. Glatfelter’s sales exceed USD 1 billion annually and its common stock is traded on the New York Stock Exchange under the ticker symbol GLT. Additional information may be found at www.glatfelter.com