Glatfelter Agrees to Buy Two UK Wet Laid Non Woven Mills

March 14, 2006 (Press Release) - Glatfelter announced [yesterday] two separate transactions to acquire certain assets of J. R. Crompton Limited, a global supplier of wet laid nonwoven products based in Manchester, United Kingdom.

Under the terms of the first transaction, Glatfelter today acquired Crompton’s Lydney Mill, located in Gloucestershire, United Kingdom, for GBP37.5 million (US $65.1million). The facility employs about 240 people and had 2005 revenues of approximately GBP43 million (US $75 million).

“This acquisition is in the center of our strike zone,” said George H. Glatfelter, II, Chairman and Chief Executive Officer. “It represents an exceptional opportunity to accelerate the growth of our wet laid nonwoven products business. Additionally, it expands our geographic footprint in the United Kingdom, Asia, and the Americas, complements our European operations, and supports our vision of becoming the global supplier of choice in specialty papers and engineered products.”

Mr. Glatfelter stated, “The Lydney assets are an ideal fit with Glatfelter’s wet laid nonwoven business. Our shareholders will benefit from this acquisition that is expected to be accretive to earnings, exceeds the company’s cost of capital, and is focused on a strategic market with attractive growth potential. This purchase, when coupled with our recently announced acquisition of the Carbonless Papers business of New Page Corporation, generates an exciting new platform for creation of shareholder value.”

The Lydney mill produces a broad portfolio of wet laid nonwoven products, including tea and coffee filter papers, clean room wipes, lens tissue, dye filter paper, double-sided adhesive tape substrates and battery grid pasting tissue.

“This mill initially will operate as a standalone business and, together with our European mills, will form a new Composite Fibers business unit,” said Mr. Glatfelter. “As the wet laid fiber and papers markets continue to evolve, this new global organization will enable us to maximize growth and profitability in the face of alternative substrate technologies.”

Glatfelter also announced that it has signed an agreement to purchase Crompton’s Simpson Clough Mill, located in Lancashire, United Kingdom, and other related assets for GBP12.5 million (US $21.7 million), subject to regulatory approval. The mill employs about 95 people and had 2005 revenues of approximately GBP16.2 million (US $28 million). The Simpson Clough facility also manufactures a wide variety of wet laid, nonwoven products.

“The purchase of this facility and the expertise of its employees will provide additional capacity and capabilities to better serve the global market,” said Mr. Glatfelter.

SOURCE: Glatfelter

PaperAge. Copyright © O'Brien Publications, Inc. All rights reserved.