Hexpol buys Trelleborg’s Czech compounding unit for 65 million euros

Hexpol has today acquired 100 per cent of Trelleborg Material & Mixing Lesina s.r.o from the Trelleborg Group. The divested operation develops, produces and supplies polymer compounds. The majority of its sales are to external customers and a minor share to a small number of Trelleborg facilities in Europe.

Trelleborg Material & Mixing Lesina s.r.o, which is based on a manufacturing facility in Lesina, Czech Republic had a turnover of 40 million euros in 2016 and has around 125 employees. The acquisition price is estimated at approximately 65 million euros on a cash and debt free basis and has been funded by a combination of cash and existing bank facilities.

For its part, Trelleborg reports that the divested operation had annual external sales of approximately 300 million Swedish krone (31.458 million euros) in 2016. The transaction is expected to result in a book capital gain of approximately 450 million krone (47.187 million euros) after tax. While on the conservative side, Trelleborg’s numbers are in line with Hexpol’s because the sales figure refers only to external sales and because the capital gain value of 47 million euros is post-tax. This suggests the difference between Hexpol’s 65 million euro price-tag this lower figure is accounted for by taxation.

Trelleborg Material & Mixing Lesina s.r.o main end-user segments are within the automotive industry, general industry, building and construction. According to the company, the acquired business has an EBITDA margin below the Hexpol Group as a whole, but is expected to have a positive impact on earnings per share. Trelleborg said the Material & Mixing business’ profitability is in line with Trelleborg’s as a whole, suggesting that Trelleborg’s overall profitability margins are lower than Hexpol’s and that Hexpol believes it can increase this to its levels post integration.

“The acquisition is a very good complement to Hexpol Compounding in Europe and broadens and strengthens our presence with Rubber Compounds in the central European market. Trelleborg’s Rubber Compounding unit in Lesina, Czech Republic expands our capabilities and capacities to serve our customers in a more efficient way”, said Carsten Rüter, President Hexpol Compounding Europe.

“This is a further step in expanding and strengthening the Hexpol Group with a further acquisition within our core business. Trelleborg’s rubber compounding unit in Czech Republic, with its competence and capabilities, will fit nicely into the Hexpol Group and gives us a stronger presence in central Europe”, Georg Brunstam, CEO Hexpol Group commented.

“Our focus is on the development and production of engineered polymer-based solutions. The task of our compounding operations is to supply Group’s facilities with high quality compounds that are important components of our end products. The Czech operation has a large external customer base. This means that it also sells compounds to our direct and indirect competitors, which does not make the business sustainable for us in the long term. Therefore, it will develop better with another owner,” said Peter Nilsson, President and CEO of Trelleborg.

Hexpol has been on something of a buying streak in recent years, having purchased US compounder Robbins LLC in November 2012, Kardoes Rubber in 2014 and UK compounder Berwin Group in June 2016.


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