Scapa announces $45m US deal
TAPE maker Scapa is to buy a US-based company which makes adhesive-backed medical devices for up to $45m (£28.7m).
Scapa is paying $30m (£19.1m) upfront for the business, assets and goodwill of Knoxville-based WEBTEC Converting. The remaining sum of up to $15m (£9.6m) will be payable depending on WEBTEC’s financial performance over the next two years.
WEBTEC uses a range of materials including medical grade silicone, foams, film, and hydrogel in areas such as advanced woundcare and in attaching medical and diagnostic devices to patients.
Scapa said the acquisition fits its strategy of building a greater presence in medical, industrial and electronic markets.
It added that deal would bring in “a well-invested business which will complement Ashton-under-Lyne-based Scapa’s existing medical operations in California, Connecticut and the UK”.
It said that WEBTEC had grown quickly in recent years having delivered a global supply deal for a big pharmaceutical company, and it has recently won several new pieces of business, including a contract for making a silicone-based dressing which its management expect to be “substantial”.
In 2010, WEBTEC made an operating profit of $3.6m on sales of $27m, and for 2011 it expects sales to increase to $29m. Its operating assets are valued at $9.3m.
Scapa said that the deal will be funded by existing reserved and a new £20m loan, which is repayable in June 2015. The new loan is a revolving credit facility which is being provided equally from the Manchester offices of Lloyds Bank Corporate Markets and Yorkshire Bank.
Heejae Chae, chief executive of Scapa Group, said: “Our growth strategy has been to seek acquisition opportunities which strengthen our capability and enhance our global business.
“WEBTEC significantly expands and gives critical mass to our medical business. Its blue-chip customer base and strong management team are an excellent fit with our Group and will enable us to offer turn-key solutions in advanced wound care and consumer medical segments.
“I am confident that this acquisition will allow us to continue the strong progress we have made in the last 18 months.”
