Glatfelter Corporation, a leading American supplier of engineered materials, has entered into a definitive agreement to acquire Jacob Holm, a global leading manufacturer of premium quality spunlace nonwoven fabrics, for an enterprise value of approximately $308 million including the extinguishment of debt and subject to post-closing adjustments.

Jacob Holm offers spunlace nonwoven technologies and advanced fibre-based sustainable solutions that will increase Glatfelter’s diversification into complementary segments serving the wipes, healthcare and hygiene categories. With the acquisition of Jacob Holm, Glatfelter will acquire four additional manufacturing facilities and six sales offices located in the Americas, Europe and Asia, and approximately 800 employees worldwide, the companies said in a joint press release.

Jacob Holm’s broad product offerings and blue-chip customer base will expand Glatfelter’s portfolio to include surgical drapes and gowns, wound care, face masks, facial wipes and cosmetic masks. The acquisition of Jacob Holm’s Sontara business, a leading brand of finished products for critical cleaning wipes and medical apparel, will also enhance Glatfelter’s technological capabilities.

Jacob Holm generated approximately $400 million in revenue and about $45 million of EBITDA on an LTM basis as of June 30, 2021, supported by strong pandemic tailwinds. Glatfelter believes Jacob Holm’s June LTM results include a benefit from COVID-related demand estimated to be between $10 million and $15 million of EBITDA. Glatfelter expects to realise annual cost synergies of approximately $20 million within 24 months of closing and is committed to deleveraging its balance sheet following the consummation of this transaction.

“Today’s announcement represents another significant step forward in Glatfelter’s transformation. The combination of Jacob Holm’s quality spunlace and advanced fibre products along with Glatfelter’s industry-leading airlaid and composite fibres products will provide a best-in-class suite of nonwovens technologies, applications and expertise to serve customers’ growing global demand. By acquiring Jacob Holm, we will further diversify our nonwovens and substrate offerings and enhance our overall innovation capabilities,” said Dante C Parrini, chairman and chief executive officer of Glatfelter.

The transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory clearances, and is expected to be completed later this year. Glatfelter has obtained committed financing for this transaction from HSBC Securities (USA) Inc and intends to fund the acquisition with unsecured debt. Glatfelter will also pursue extending the maturity date of its syndicated revolving credit facility.

Credit Suisse acted as Glatfelter’s financial advisor in connection with the transaction and Shearman & Sterling LLP as its legal advisor.