Thu, 02/20/2014 - 00:00

MANCHESTER, Conn. (Feb. 20, 2014) – Lydall, Inc. announced that it has acquired the industrial filtration businesses (Andrew Filtration) of Andrew Industries Limited, an Altham, UK-based corporation, for $83 million in cash. The transaction strengthens Lydall's capacity as a provider of filtration and engineered materials products and diversifies its end markets and geographic revenue base. Andrew Filtration manufactures and supplies non-woven felt filtration media and filter bags used primarily in industrial air filtration applications. Non-woven filter media is the most commonly used filter technology to satisfy increasing emission control regulations in a wide range of industries, including power, cement, steel, asphalt, incineration, food and pharmaceutical. The acquired business consists of operations in the United States, the United Kingdom, and China, and approximately 500 employees. For the 12 months ended Dec. 31, 2013, Andrew Filtration's unaudited revenue was approximately $127 million and unaudited EBITDA was approximately $14 million, excluding non-recurring items. Once the business is fully integrated, Lydall expects to leverage its operating discipline and support functions to generate anticipated annual cost savings of approximately $4 million by 2016. The acquisition is expected to be accretive to Lydall's 2014 full-year earnings and free cash flow, inclusive of transaction expenses, the effect of inventory step-up, and incremental amortization of intangible assets. Lydall's financial results for the fourth quarter of 2013 will include approximately $1 million of transaction expenses and it is estimated that approximately $3 million of transaction expenses will be incurred in the first quarter of 2014. The acquisition is being financed through a combination of cash-on-hand and $60 million of borrowings from Lydall's recently expanded $100 million revolving credit facility. Dale Barnhart, Lydall's President and Chief Executive Officer, stated, "The acquisition of Andrew Filtration expands our global footprint, adds complementary and new technologies, as well as substantial scale that provides a platform for long-term growth, and better positions us to deliver meaningful shareholder value." Barnhart added, "With this acquisition, Lydall's filtration and engineered materials segments are expected to contribute approximately 50 percent of Lydall's consolidated revenue. We expect that new growth opportunities will result from manufacturing and selling complementary products and leveraging Andrew Filtration's well-established presence in faster-growing Asian markets. We also expect to apply Lydall Lean Six Sigma principles to the acquired businesses and achieve margin and working capital improvements as we have previously demonstrated in our existing operations." Ted Andrew, Andrew's Chairman, commented, "I could not be more pleased to have Andrew's industrial filtration business become a part of the Lydall family. I know Lydall, like Andrew Industries, prides itself on upholding the highest standards of commercial and technical integrity, innovation, and quality so the businesses fit extremely well together. I wish Lydall and all the employees working within the filtration business every success." C. W. Downer & Co., an independent global middle-market investment bank based in Boston, Mass., acted as exclusive financial advisor to Lydall, Inc., on this acquisition. Lydall, Inc. focuses on manufacturing specialty engineered products for the thermal/acoustical, filtration/separation and bio/medical markets.