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[January 2009]
Carbone Lorraine Acquires Calcarb
Carbone Lorraine has announced the takeover of Calcarb, the world number two in rigid graphite felt. Claude Cocozza, Chairman and CEO of Carbone Lorraine, said: "This acquisition constitutes a unique opportunity that fits in with our ‘Expansion 2011’ business plan. We are particularly pleased to have been able to see this acquisition through successfully".
Rigid felts are used as a sophisticated form of insulation in very high temperature furnaces. The outlets for this product therefore fit in with the Advanced Materials & Technologies Division’s industrial markets. Use of these insulating products has grown at a very rapid rate over the last few years, initially in electronics and now in solar energy. This has resulted in a shortage of supply of rigid felts relative to the level of demand in these markets.
Calcarb is a subsidiary of Inductotherm, which specialises in vacuum furnaces, in particular induction furnaces. Calcarb's head office and production plant are in Scotland, close to Edinburgh. It recently more than doubled its annual production capacity by building a new plant. In view of this new production capacity, Carbon Lorraine Group is expected to generate sales of €35 million from Calcarb products in 2009. The group is aiming for sales growth of at least 15% a year for the years ahead thanks to extremely brisk demand in the solar energy market.
Carbone Lorraine said it would acquire 60% of the company's shares on 31 December 2008 and has an option to increase its stake to 100% that can be exercised at any time in 2009. The acquisition is financed by debt. This acquisition will enable Carbone Lorraine to enter a market adjoining the graphite market, with growth driven primarily by solar energy activities. Calcarb's products are regarded by clients as the best in the market in terms of quality. This contributes to Calcarb’s very good profitability and provides protection during more difficult times.
With no international network of its own, access to the Carbone Lorraine network will constitute a source of considerable commercial synergies for the company. The acquisition is therefore likely to generate a high rate of return, in line with Carbone Lorraine's demanding criteria. Return on capital employed before tax should reach the target level of 20% from the fourth year of the acquisition, said the company. Furthermore, the technology used by Calcarb will complement other technologies currently being developed by the group for the insulation market, which creates additional potential for growth.
ENDS