Hexpol acquires Kirkland Rubber for US$46m

September 14, 2018

hexpolHexpol has recently acquired of the business of Kirkhill Rubber from the founder Edward Reker, his family and co-owners. Kirkhill as a company with experience in aerospace, automotive, medical, and other demanding industry segments, had started expanding into silicone and perfluoroelastomer compounds. Kirkhill Rubber has annual sales of about US$46 million.

Kirkhill Rubber brings extensive knowledge in highly engineered elastomers with their wide range specialty equipment, and complete laboratory testing facilities, further enhancing Hexpol’s goal to be the top compounder.

Kirkhill Rubber’s recently acquired state of the art facility in Long Beach, California will be the sole manufacturing plant of Kirkhill. The production in Downey, California will be transferred to Long Beach and the production in Athens, Georgia will be transferred to other Hexpol sites in the US. Thereby the facilities in Downey and Athens are not included in the transaction.

The acquired business has an EBITDA margin below the Hexpol Group and is expected to have a positive impact on earnings per share.

“This acquisition is a very good complement to Hexpol Compounding in the US and broadens and strengthens our presence with Rubber Compounds by highly skilled people and advanced processes. Kirkhill’s recent purchase of the facility located in Long Beach, California further increases our ability to provide superior products and unparalleled service for our customers,” says Hexpol president, Tracy Garrison.

Edward Reker, Kirkhill’s President, who will continue with Hexpol, announced that they will see an immediate benefit by access to Hexpol’s global material reach, expanded development resources and advanced quality systems, that will translate into exceptional service and even enhanced products to customers.

The acquisition price amounts to approximately US$49 million on a cash and debt free basis and is funded by a combination of cash and existing bank facilities. The business will be consolidated from September 2018. A smaller performance based consideration will be paid later if certain criteria are met.

Swedish company Hexpol specialises in advanced polymer compounds, gaskets for plate heat exchangers, and plastic and rubber materials for truck and castor wheel applications. The group is organised in two business areas, Hexpol Compounding and Hexpol Engineered Products. Its sales in 2017 amounted to 12,230 MSEK and it has approximately 4,400 employees in 11 countries.


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