Arjowiggins to sell its casting paper business in UK to Italy-based Favini for €26.5M; deal, which is expected to close before year-end, includes dedicated finishing equipment, long-term agreement for Arjowiggins to supply Favini with base papers
ROSSANO VENETO, Italy
November 7, 2013
– Through this transaction Favini will become the worldwide leader in one of the highest value added sector of the paper manufacturing business, with almost 75M euro of sales in the release papers niche.
Favini and Arjowiggins, part of Sequana, the French listed paper group, have entered today into an agreement for the transfer of the casting papers business from Arjowiggins Creative Papers to Favini.
Casting release papers represent a key component in the manufacturing of synthetic materials like man-made leather, and are used to give the final pattern and look & handfeel to synthetic surfaces. Key industries involved are fashion, sport shoes, furniture, automotive, IT, etc.
Favini will take over the commercial organization and the market share of AW casting papers and AW will supply in the long term semi-finished products to Favini. Favini will also acquire the machineries involved in the finishing of casting papers currently run in the AW mill in Stoneywood, increasing its production capacity.
Through this transaction Favini will become the worldwide leader in one of the highest value added sector of the paper manufacturing business, with almost 75M euro of sales in the release papers niche. The broad commercial offer of Favini will achieve over 200 different patterns and finishing solutions, to address almost any design need.
Andrea Nappa, CEO of Favini and partner of Orlando Italy said: "We are proud of having achieved an important consolidation in the market; the integration of the 2 players will ensure to Favini a wider market coverage worldwide and will provide the opportunity to benefit from industrial synergies and scale economies, which will make Favini an even stronger player in the specialty paper industry, with almost 165M euro in sales, 90M euro of which addressed at niches such as luxury packaging, security papers, high quality communication and stationery, besides casting release papers which will represent about 75M euro in sales.
Such evolution will also allow Favini to reach a larger critical mass to compete in a sector requiring a higher yield of product innovation and a step ahead in the qualitative levels to maintain leadership in a more competitive business environment.
We also trustful that the long term manufacturing and supply agreement signed with Arjowiggins Creative Papers will allow both companies to benefit from this consolidation".
The consideration include an evaluation of the business line acquired of 26.5M euro and commercial arrangements on future supplies.
Favini has raised the financing for the acquisition from its major shareholder Orlando Italy and from a pool of Italian banks. Orlando has in fact committed up to 18M euro to support Favini in this transaction. Closing is expected before year end.
The advisors involved by Favini in the transaction were AlixPartners, E&Y, NCTM and Dundas & Wilson.