Acquisitions

GE has announced its intent to purchase LM Wind Power, a Denmark-based manufacturer and supplier of rotor blades to the wind industry.

The deal, which is expected to be worth $1.65 billion will improve GE’s ability to increase its energy output and create value for onshore and offshore customers. Since 2001, LM Wind Power has been owned by Doughty Hanson, a London-based private equity firm.

The acquisition is valued at 8.3 times pro forma earnings before interest, taxes, depreciation and amortisation (EBITDA) (2016 estimate). The transaction is subject to customary regulatory and governmental approvals and GE expects to close the transaction in the first half of 2017. GE expects the acquisition to be accretive to earnings in 2018.

As the cost of electricity from renewable sources continues to decline and nations pursue low-carbon forms of energy, renewable sources are gaining share in power generation capacity. In 2015, approximately 50% of all new electricity capacity additions were renewable energy sources, with wind representing 35% of that growth.

Following the closing of the deal, GE intends to operate LM Wind Power as a standalone unit within GE Renewable Energy and will continue to fully support all industry customers with the aim of expanding these relationships. GE will also retain the ability to source blades from other suppliers. LM Wind Power will continue to be led by its existing management team and be headquartered in Denmark, where it also maintains a global technology centre.

Teijin has announced that it’s agreed to acquire Continental Structural Plastics, an automotive composite supplier in North America, for $825 million.

CSP will become a wholly owned subsidiary of Teijin. Through this acquisition, Teijin intends to establish the foundations of an automotive composite products business in North America, and to accelerate its expansion as a tier 1 supplier of high-performance composites to the global automotive market.

The shares of CSP will be purchased by Teijin Holdings USA Inc., the Teijin Group’s holding company in the US. The acquisition is scheduled to be completed in December 2016 after satisfaction of customary closing conditions, including regulatory approval.

CSP is a manufacturer of thermoset composites in the automotive industry and is the world’s largest sheet moulding compound (SMC) manufacturer for automakers. Since its establishment in 1969, CSP has provided technologies in lightweight materials and composite solutions such as glass fibre reinforced plastic (GFRP) for the automotive industry.

Headquartered in Auburn Hills, Michigan, US, CSP holds more than 50 patents covering materials development and manufacturing processes in composite materials formulation and design. Its SMC technology have been adopted by various automakers in the US, Europe and Japan. The company has 14 facilities in the US, Mexico, France and China and approximately 3,200 employees. It posted consolidated sales of over USD 634 million in the fiscal year ending December 31, 2015.

Teijin will benefit from CSP’s established sales channels in the North American automotive market, which will enable the combined business to provide a broader range of solutions that meet automakers’ demands for weight reduction and durability, utilising the company’s thermoplastic composite technologies.

Through this transaction, Teijin aims to become an automotive solution provider by expanding its offerings beyond carbon fibre and glass fibre materials, in collaboration with other materials manufacturers. Teijin intends to expand its product portfolio from materials to component design, implement a global supply chain and help achieve vehicle weight reductions in order to comply with tighter environmental regulations being introduced after 2020.

Tricel, a fully Irish owned company, has extended its fibreglass distribution with the strategic move of acquiring UK based Glasplies Ltd. This latest acquisition, situated in Southport in Merseyside, is ideally located and strengthens an already extensive and successful network of operations.

Glasplies is one of the longest independently established suppliers of Glass Reinforced Products (GRP) in the UK. The geographic location of the acquisition makes it ideal to act as a distribution gateway between the company’s presence in both the north and the south of the country.

Earlier in the year the company acquired Fiberglass Supplies (Leeds) Ltd. which is one of the country’s leading suppliers and distributors of composite and roofing materials. Along with its latest acquisitions and existing distribution centres in Gloucester and Newry, Tricel maintain a very strong presence in fibreglass distribution throughout Ireland and the UK.

This latest move is the most recent in a series undertaken by the company to facilitate its growth strategy leading up to 2020. As well as extending its fibreglass distribution network, Tricel has also extended its environmental division by adding a second manufacturing site in the south of France.

PolyOne has announced the acquisition of two specialty businesses from Gordon Holdings. The acquired businesses design and produce lightweight, high-performance solutions, using advanced composite technology.

Bolstering PolyOne’s existing portfolio of thermoset composite solutions is the acquisition of Gordon Composites, which develops high strength profiles and laminates for use in vertical and crossbow archery, sports and recreation equipment, prosthetics, and office furniture systems.

The second acquired business, Polystrand, is a leader in continuous reinforced thermoplastic composite technology, a material that delivers high strength and lightweight characteristics of composites, further enhanced with the design flexibility to form more complex shapes. Current application usage includes materials for the aerospace, transportation, outdoor and security and protection markets. Both acquired businesses will join PolyOne’s existing portfolio of complementary solutions in a new platform to be called PolyOne Advanced Composites.

Craig Nikrant, president, Specialty Engineered Materials, PolyOne Corporation said;

With these acquisitions we’ve built upon our past success and portfolio of composite solutions to now serve our customers more comprehensively than ever before.

The purchase price for both businesses was $85.5 million. The price includes all assets related to the businesses, including intellectual property, trademarks and production assets. PolyOne expects the acquisitions to add $40 million to revenues and be accretive to earnings in 2017.

Siemens will receive newly issued shares of the combined company and will hold 59% of the share capital while Gamesa’s existing shareholders will hold 41%. As part of the merger, Siemens will fund a cash payment of €3.75 per share, which will be distributed to Gamesa’s shareholders (excluding Siemens) immediately following the completion of the merger (net of any ordinary dividends paid until completion of the merger). The cash payment represents 26% of Gamesa’s unaffected share price at market close on January 28, 2016.

Additionally Gamesa and Areva have entered into contractual agreements whereby Areva waives existing contractual restrictions in Gamesa’s and Areva’s offshore wind joint venture Adwen simplifying the merger between Gamesa and Siemens. As part of these agreements, Gamesa – in alignment with Siemens-grants Areva a put option for Areva’s 50% stake and a call option for Gamesa’s 50% stake in Adwen. Both options expire in three months. Alternatively, Areva can in this time divest 100% of Adwen to a third party via a drag-along right for Gamesa’s stake.

The new company, which will be consolidated in Siemens’ financial statements, is expected to have on a pro forma basis (last twelve months as of March 2016) a 69 GW installed base worldwide, an order backlog of around €20 billion, revenue of €9.3 billion and an adjusted EBIT of €839 million. The combined company will have its global headquarters in Spain and will remain listed in Spain. The onshore headquarters will be located in Spain, while the offshore headquarters will reside in Hamburg, Germany, and Vejle, Denmark.

The two businesses are highly complementary in terms of global footprint, existing product portfolios and technologies. The combined business will have a global reach across all important regions and manufacturing footprints in all continents. Siemens’ wind power business has a strong foothold in North America and Northern Europe, and Gamesa is well positioned in fast-growing emerging markets, such as India and Latin America, and in Southern Europe. Further, the transaction will result in a product offering covering all wind classes and addressing all key market segments to better serve customers’ needs.

PPG’s European fibreglass business manufactures reinforcement materials for thermoset and thermoplastic composite applications. It serves the transportation, energy, infrastructure and consumer markets.

In 2015, sales for PPG’s European fibreglass operations were approximately $150 million. The company currently employs around 550 people in its manufacturing facilities in Hoogezand, Netherlands and Wigan, England.

The transaction is subject to completion of employee consultation processes, receipt of regulatory clearances and other customary closing conditions. PPG and NEG expect to close the transaction in the second half of 2016. Financial terms were not disclosed.

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