NEWS RELEASE                                                                                         SEPTEMBER 2014

Substantial Merger Activity in the Air Filtration Industry

Over the last year there have been a number of acquisitions in the air filtration industry as companies strengthen their reach in three key areas.

• Technology
• Geography
• Industrial users

These are the conclusions reached by the McIlvaine Company in Air Filtration and Purification World Market.

Eastman Chemical - Knowlton

Eastman Chemical Company is acquiring Knowlton Technologies, LLC. The company, which is located in Watertown, NY, is a leader in the design, accelerated prototyping and manufacture of wet-laid nonwovens in filtration, friction and custom designed composite webs.

“Knowlton Technologies is a trusted and established leader in advanced materials with an expertise in wet-laid media prototyping and formulation development,” says Tim Dell, vice president, innovation, Eastman. “This acquisition will bring a set of complementary skills and development capabilities that will help Eastman better innovate with our nonwovens-producing customers and accelerate the innovation cycle for microfibers in important markets like filtration.”

Neenah Paper - Crane Technical

Neenah Paper, Inc. recently purchased Crane Technical Materials, Inc. from Crane & Co., Inc. The company, to be renamed Neenah Technical Materials, provides performance-oriented wet laid nonwovens media for fast growing filtration end markets as well as for environmental, energy and industrial uses. Annual sales of approximately $50 million are supported through two manufacturing operations located in Pittsfield, Massachusetts.

"We are excited to move forward now as a company with an expanded manufacturing platform serving a broader base of filtration and other performance-oriented technical markets and customers," said John O’Donnell, Chief Executive Officer. "This acquisition clearly fits our strategy of expanding in profitable specialty niche markets with above average growth rates and attractive financial returns. In addition, it nicely complements our European filtration business and provides new technologies that represent a platform for future growth."

The purchase price of $72 million comprised of $64 million for the business and $8 million related to future cash tax benefits.

Neenah, headquartered in Alpharetta, Georgia, is a leader in premium image and performance-based products, including filtration, with products sold in over 70 countries worldwide from manufacturing operations in the United States and Germany.

Lydall-Andrew

Lydall has acquired the industrial filtration business belonging to Andrew Industries for a deal valued at $83 million in cash. The acquisition strengthens Lydall's position as an industry-leading global provider of filtration and engineered material products and diversifies the company's end markets and geographic revenue base.

Andrew is a leading global manufacturer and supplier of nonwoven filtration felt media and filter bags for industrial air filtration applications. In the U.S., these products are sold under the brand Southern Felt while in Europe they are known as Andrew Webron and in Asia as China Felt Company. Nonwoven filter media is the most commonly used filter technology to satisfy increasing emission control regulations in a wide range of industries including power, cement, steel, asphalt, incineration, food and pharmaceuticals. The acquired business consists of operations in the U.S., the U.K. and China and approximately 500 employees. In 2013, Andrews' sales were about $127 million. 

"The acquisition of Andrew Filtration expands our global footprint, adds complementary and new technologies as well as substantial scale that provides a platform for long-term growth and better positions us to deliver meaningful shareholder value," says Dale Barnhart, Lydall's filtration and engineered materials segments are expected to contribute approximately 50 percent of Lydall's consolidated revenue. We expect new growth opportunities will result from manufacturing and selling complementary products and leveraging Andrew Filtration's well established presence in faster growing Asian markets."

MANN+HUMMEL - Vokes Air

The MANN+HUMMEL Group with headquarters in Ludwigsburg acquired Vokes Air from The Riverside Company, an international private equity firm. The Swedish-based company Vokes Air, a leading filtration solutions provider, produces and distributes filters for indoor and process air purification. In Europe, the company’s 400 employees are currently based primarily in Germany, Sweden, and the U.K. With this acquisition, MANN+HUMMEL is following its growth strategy, which includes increasing their presence in filtration markets outside of the automobile industry.

Alfred Weber, CEO of MANN+HUMMEL notes: “With Vokes Air, we enter a new market with great potential. This acquisition creates new chances for both the companies and the employees.”

The HVAC segment (Heating, Ventilation and Air Conditioning) has approximately a 15 percent share in the global filtration market, and offers attractive growth rates. This segment belongs to the mega-trend of ‘air purification’, which has a growing importance for medical and industrial applications (e.g. clean room requirements).

Clarcor - GE Air Filtration (former BHA)

Clarcor, Inc. has acquired the Air Filtration business of General Electric Company's Power and Water division for approximately $265 million. With over 700 employees around the world and annual revenues of approximately $230 million, the business is a leading supplier of air filtration systems and filters used in gas turbine applications, as well as industrial air filtration products and membranes. Headquartered in Overland Park, Kansas and with manufacturing operations in Missouri, the UK and China, the business will continue to supply gas turbine air inlet filtration systems and filters to GE, which has the world's largest installed base of natural gas turbines, under a multi-year supply agreement.

Christopher L. Conway, Clarcor's Chairman, President and Chief Executive Officer commented, "We are very excited about this acquisition and the multiple opportunities it offers Clarcor. Each element of this business - gas turbine filtration, industrial air filtration, and membranes - is attractive and fits within our core strategies and competencies. This transaction creates exciting new vertical opportunities and relationships, affords us access to various new technologies, broadens our already extensive product portfolio and solidifies what we believe is our standing as the most diversified filtration company in the world.

"With this transaction, Clarcor will become a leading designer and supplier of air inlet filtration products for natural gas turbines, a business we believe is poised for long-term growth as the world continues to shift toward natural gas as its energy source of choice. Clarcor traditionally has had little presence in the gas turbine business and we believe this transaction will immediately position Clarcor as a major player in the space and provide a strong platform from which to grow, both with respect to first-fit applications as well as the aftermarket.

Filtration Group – Porex

Filtration Group Corp acquired Porex Corp from investment firm Aurora Capital Group. Filtration Group, which is owned by Chicago-based Madison Capital Partners, specializes in liquid, air and fluid filtration solutions. The Filtration Group portfolio already includes AG Industries, Air Flow Technology, Chemco Manufacturing, Clear Edge Filtration, Dafco Filtration Group, Filtrair, Filtran, Filtration Group, Global Filter, Jonell, Universal Air Filter and Waco Filters. AG Industries, Clear Edge Filtration and Jonell were all acquired recently.

SWM – DelStar

SWM acquired DelStar from the investment firm American Capital Strategies. DelStar Technologies is a custom manufacturer of plastic and metal components used in filtration, automotive, healthcare, industrial, food, electronics and textile markets. Their products include a wide variety of plastic nets, nonwovens, tubes, and cores, plus specialized plastic and metal machined parts. The DelStar Technologies’ brands include Naltex extruded netting, Delnet apertured films, DelPore meltblown nonwovens, Stratex laminate composites and Coretec extruded cores, tubes and machined parts. DelStar is headquartered in Middletown, DE, has manufacturing operations at that location, as well as in Austin, TX; Richland, PA; El Cajon, CA; and Suzhou, China. 

SWM is a provider of highly-engineered and proprietary solutions primarily for the tobacco industry. It also manufactures specialty papers for other applications. SWM and its subsidiaries operate in over 90 countries and employ about 2,500 people worldwide, with operations in the U.S., France, Brazil, Canada, Poland and two joint ventures in China.

PGI – Fiberweb

Two of the world's largest nonwovens producers have merged Polymer Group Inc. has acquired  Fiberweb.

Fiberweb specializes in technical applications and geosynthetics. Two years ago, the company significantly downsized itself through the sale of its hygiene-related assets to Fitesa. Its 2012 sales were about $460 million. PGI is heavily invested in the hygiene market with spunmelt assets located around the globe. It has made no secret of its intent to diversify further into more technical applications and already has a decent foothold in a number of industrial and filtration related areas. In 2012, its sales were $1.15 billion.

Air Filtration and Purification World Markets forecasts revenues by product, geography and industry and provides market shares and strategic analysis of the industry. For more information, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/108-n022