Becomes global leader in polymer-coated high-precision material
Trelleborg, through its Engineered Systems business area, has signed an agreement to acquire the American company Reeves Brothers Inc., with about 1,000 employees and annual sales of approximately SEK 1.4 billion.
Reeves is a leading international player in the development and production of polymer-coated, high-precision material in, for example, rubber, silicon and polyurethane. The acquisition provides Trelleborg with a world-leading position in polymer-coated fabrics and thereby strengthens what was already a market-leading position in the European market.
Reeves, with its head office in Spartanburg, South Carolina, has four production units, of which two are in the US, one in Italy and one in China. Reeves’ operation is divided into two divisions of equal size: Engineered Fabrics – polymer-coated fabrics with numerous application areas such as the aerospace industry, personal protective equipment, the defense industry and fluid solutions – and Printing Blankets – polymer-coated composite fabrics designed in several layers for use in commercial offset printing.
“The acquisition is another step in our strategy of growing in profitable industrial segments”, says Peter Nilsson, President and CEO of Trelleborg. “Reeves’ areas of operation are based on precision material that satisfy high demands for reliability, robustness and elasticity, which means that they correspond well with Trelleborg’s core competencies: to seal, damp and protect in demanding industrial environments. With printing blankets, the acquisition opens a new and growing market segment for us, while also generating synergies in existing operations. As a result of the acquisition, the Trelleborg Group’s structure is further improved.”
“Printing blankets for the graphic industry is a very attractive segment for us, in which we will now expand our customer group based on our technology and applications know-how. Reeves has a very strong position in this consolidated, profitable and growing segment with high entry barriers,” says Lennart Johansson, Business Area President of Trelleborg Engineered Systems. “In total, Reeves provides us with a strong platform with excellent geographical cover; we gain a leading position in the US and establish ourselves in a rapidly growing market in China, while consolidating operations in Europe and creating favorable synergies.
“Reeves’ earnings capacity is favorable and its operating margin is higher than that of Trelleborg Engineered Systems in its entirety.”
The purchase price totals approximately SEK 1,300 M in cash. The acquisition is conditional upon the fulfillment of certain terms, and requires the approval of the appropriate authorities. The acquisition is expected to be completed during the fourth quarter of 2006. The operations will be integrated into Trelleborg Engineered Systems.
Reeves is currently owned by a number of investment funds and separate accounts that are managed by Oaktree Capital Management LLC.