LONDON: Coats Group plc has signed a binding agreement to acquire the business and assets of Pharr High Performance Yarns (Pharr HP). Coats Group is the world’s leading industrial thread manufacturer.

The transaction consideration is $37 million. The acquisition will be funded from Coats’ operating cash flows and existing debt facilities.

Pharr HP is a market leading manufacturer of high-performance engineered yarns based in McAdenville, North Carolina, US. Founded in 1939, it has around 350 employees. In its latest financial year, Pharr HP’s annual sales were $110 million and adjusted EBITDA of $5 million.

Pharr HP specialises in providing technical yarn solutions to the growing markets of Industrial Thermal Protection, Defence and Fire Service industries. The acquisition of Pharr HP’s manufacturing capabilities and customer base provides further expertise and scale to Coats’ existing Personal Protection business (part of the Performance Materials segment).

Coats will enhance Pharr HP’s performance by leveraging its extensive textile experience, strong industry connections, existing operational footprint in North America, and Coats’ strong global brand to deliver high performance solutions for its customers.

The acquisition is subject to certain regulatory approvals and is expected to complete in early 2020.

Rajiv Sharma, Coats Group Chief Executive, said: “Pharr HP expands our existing manufacturing capabilities and widens our innovation offering to drive further penetration into the Personal Protection market. With Pharr HP we are acquiring deep expertise in technical yarn solutions helping us to create ever lighter, stronger and more comfortable yarns for the most extreme environments, protecting many of those who protect us. We will draw upon our strong track record of successfully integrating and growing bolt-on acquisitions, including Gotex and Patrick Yarn Mill which form an integral part of our Performance Materials business.”