 "SWM acquires Conwed Plastics for $ 295 million")
SWM has acquired Conwed Plastics Llc, a leading producer of engineered resin-based netting solutions with significant operating synergy opportunities with existing Advanced Materials & Structures (AMS) segment operations, for $ 295 million. Conwed is currently a portfolio company of Leucadia National Corporation, a publicly traded diversified holding company.
Given the transaction structure and tax basis step-up, SWM expects to realise tax benefits having an estimated net present value of approximately $ 75 million. Assuming realisation of all tax benefits, the after-tax economic cost of the transaction is estimated to be approximately $220 million. The agreement also includes potential long-term earn-out payments.
Conwed Plastics is the leading producer of resin-based netting solutions with proprietary manufacturing processes and innovative technologies. Netting products are used in highway infrastructure development, oil & gas exploration, filtration, and construction.
Conweb had registered sales of approximately $ 140 million last year with annual growth projected in the 3-4 percent range.
Frederic Villoutreix, chairman of the board and chief executive officer of SWM, commented “With Conwed's assets and technologies, which are similar to DelStar’s, SWM will become the clear global leader in resin-based netting with best-in-class operations and products, and strong positions in several attractive niche applications. In addition to filtration applications, where we currently have a strong presence, Conwed's netting provides critical functionality in erosion and sediment control for highway infrastructure and oil and gas site development, as well as carpet and turf backings used in residential construction.”
The Conwed acquisition represents SWM’s fifth diversification transaction since 2013 and puts its AMS segment's annualised sales well over $ 400 million.
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