CLERMONT-FERRAND, France—Michelin, in moving beyond tires, is looking "to become a global leader in high-tech engineered fabrics and films" with the pending purchase of Paris-based Flex Composite Group for more than $764 million, according to the French tire manufacturer.
The transaction, announced June 19, is expected to close sometime in the third quarter of this year.
Michelin agreed to purchase FCG, which has six manufacturing subsidiaries throughout Northern Italy, from IDI, a French private equity firm.
Financing was completed with 100-percent available cash, Michelin said.
"Michelin's strong financial position will be maintained post-transaction," Yves Chapot, general manager and chief financial officer for Michelin Group, said during a June 19 investor presentation. "This is an important step to developing Michelin beyond mobility and positioning it as a key player in polymer composite solutions, in line with the Michelin in Motion 2030 strategy.
"We will leverage both companies' distinctive capabilities to unlock ... innovation synergies in a broad range of products and applications."
The acquisition, when finalized, is expected to boost overall revenue within Michelin High-Tech Materials (which represents between 3 and 5 percent of overall Michelin Group sales revenues) by about 20 percent, Chapot said.
FCG saw about $220.5 million in annual revenue last year, according to Michelin, with an EBITDA margin of between 25 and 30 percent.
Organic growth between 2015 and 2022 measured at about 11 percent per year for the firm.