Coats Group PLC on Wednesday said it has agreed to buy Texon International Group Ltd, strengthening its presence in the athleisure footwear market.
Texon is a supplier of structural components, including heel counters, toe puffs and insoles, to the footwear market. It has operations in both Asia and Europe.
The Uxbridge, England-based thread manufacturer said that it has agreed to buy Texan for an enterprise value of $237 million, and a total net cash consideration of $211 million after deducting assumed retirement liabilities and other customary adjustments.
In 2021, Texon generated revenue of $132 million and earnings before income, tax, depreciation and amortisation of $21 million.
Coats expects the acquisition to be earnings enhancing in the first year and to generate annual synergies of around $5 million by the end of the second full year of ownership.
The thread manufacturer added that Texon is a ‘complementary addition’ to its existing footwear business, and it anticipates that it will bring ‘attractive commercial opportunities’.
Coats Chief Executive Rajiv Sharma said: ‘The acquisition of Texon will strengthen our existing presence in the highly attractive athleisure footwear market. The business is complementary to Coats and provides attractive future commercial opportunities as we work together leveraging our combined expertise and knowledge to succeed with our customers.’
Shares in Coats were up 2.7% to 61.90 pence each in London on Wednesday morning.
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