Ferro acquire Egyptian tile coatings manufacturer

Ferro to acquire Egyptian tile coatings manufacturer

12:36 PM, 4th September 2015
Ferro to acquire Egyptian tile coatings manufacturer

CLEVELAND, US: Ferro Corporation said that it will acquire 100 percent equity of Egypt-based tile coatings manufacturer Al Salomi for frit and glazes (Al Salomi) on a cash-free and debt-free basis, for approximately $39 million in cash.

The transaction is expected to close within the next 60 days.

Al Salomi is one of the leading manufacturers of frits and glazes in the Middle East and North Africa (MENA). It is a leading manufacturer of frits and glazes with estimated 2015 sales in excess of $24 million. Al Salomi’s 5,600-square metre plant, located in Suez, Egypt, includes continuous furnaces and computerized production lines and is expected to be one of Ferro’s lowest cost frit production sites. Current production capacity is 55,000 metric tonne per year. An additional two lines or 12,000 metric tonne per year, of new tile coatings capacity is under construction and due to be operational by the end of 2015.

Based on 2014 ebitda, excluding expected synergies, the acquisition purchase price represents a transaction multiple of approximately 8.5. The transaction is not expected to significantly impact Ferro’s 2015 earnings but is expected to be accretive to adjusted diluted earnings per share by $0.03 to $0.06 in 2016.

“The acquisition of Al Salomi will bring Ferro much-needed production capacity in MENA, an attractive tile market, with growing demand. This transaction is also strategically important, as it provides capacity to support expected growth from our recent investments in Turkey, which we are using as a base to increase our sales activity for tile and porcelain enamel products into this attractive and fast-growing region,” said Peter Thomas, chairman, president and CEO, Ferro Corporation.

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