Michelin Expands Presence in Engineered Fabrics and Films with Flex Composite Group Acquisition

Michelin Expands Presence in Engineered Fabrics and Films with Flex Composite Group Acquisition

(IN BRIEF) Michelin has announced its agreement to acquire Flex Composite Group (FCG) for an enterprise value of €700 million. FCG is a European leader in engineered fabrics and films, serving industries such as marine, supercars, electric vehicles, sports, and construction. The acquisition aligns with Michelin’s strategy of expanding its polymer composite activities and leveraging innovation and R&D capabilities. The deal is expected to create a leader in high-tech engineered fabrics and films, unlocking synergies and improving environmental sustainability. The acquisition will boost Michelin’s High-Tech Materials revenue and contribute to profitability, cash generation, and EPS.

(PRESS RELEASE) CLERMONT-FERRAND, France, 16-Jun-2023 — /EuropaWire/ — Michelin (EPA: ML), a French multinational tyre manufacturing company, and IDI are pleased to announce that they have reached an agreement for Michelin to acquire 100% of Flex Composite Group (FCG) for an enterprise value of €700 million.

FCG, a leading European provider of engineered fabrics and films, caters to highly technical markets including marine, supercars and electric vehicles, sports, and construction. With expertise in a wide range of polymer composite solutions, FCG complements Michelin’s existing offerings. The company, which employs 400 people, primarily operates in fast-growing European markets with strong demand from high-end customers. FCG reported a revenue of €202 million in 2022, demonstrating an average organic growth of 11% from 2015 to 2022, with an EBITDA margin of 25-30%.

The agreement between Michelin and FCG will create a powerhouse in the field of high-tech engineered fabrics and films. This strategic acquisition aligns perfectly with Michelin’s vision outlined in its Motion 2030 strategy. It represents a significant step forward in Michelin’s expansion of its polymer composite activities into adjacent sectors, leveraging its unrivaled innovation and R&D capabilities while benefiting from FCG’s strong customer relationships and industrial expertise.

The transaction will unlock substantial innovation synergies across a broad range of products and applications, while further enhancing FCG’s environmental footprint.

With the acquisition of FCG, Michelin’s High-Tech Materials revenue is expected to grow by approximately 20%, accelerating the growth trajectory of this business segment. The transaction will contribute to Michelin’s overall EBIT margin at the Group level and the Specialty segment to which it belongs, generating positive cash flow and impacting earnings per share (EPS) positively.

“We are very pleased to extend a warm welcome to the FCG teams into our Group, to create a recognized leader in high-tech technical fabrics and films. This operation draws on the best of both companies, in particular on our shared expertise in polymer composite solutions. We are aiming to generate synergies and to push back the frontiers of deep-tech innovation in a wide range of new products and applications. This acquisition is a milestone in our strategy to position the Group as a key player in polymer composite solutions beyond mobility.” – Florent Menegaux, CEO of Michelin

“FCG has enjoyed very substantial growth in its business in the last years. This success is due to a number of key factors: recognized expertise in composite materials and films, a capacity for innovation and a strong desire to constantly improve the service provided to its customers. With Michelin, FCG will be able to increase its capacity for innovation, its actions to reduce its environmental footprint and to provide its customers with more sustainable materials.” – Emmanuel Capriglione, General Manager of FCG

The transaction would be paid in cash and is fully financed through cash at hand, with Michelin’s financial position remaining strong post transaction.

The transaction is expected to close by the end of Q3 2023, subject to customary closing adjustments and merger control clearances in relevant jurisdictions.

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