Michelin completes the acquisition of Flex Composite Group and creates a leader in high-tech engineered fabrics and films
30 September 2023
Michelin has successfully completed the acquisition of Flex Composite Group (FCG) as per the terms announced on June 19, 2023, and following the receipt of all required approvals for the transaction.
This acquisition represents a significant milestone in Michelin's Michelin in Motion 2030 strategy and a major advancement in the development of the Group's polymer composites activities. The newly formed entity will harness Michelin's unparalleled innovation and research and development capabilities, while also benefiting from FCG's extensive customer relationships and expertise in industrial processes.
FCG is a leading European provider of engineered fabrics and films, serving specialized markets such as marine, supercars, electric vehicles, sports, and construction. FCG has a strong presence in Europe and operates in rapidly growing markets with robust demand, particularly among high-end customers. In 2022, FCG reported revenues of €202 million. Over the period from 2015 to 2022, the company achieved an impressive average organic growth rate of 11%, with an EBITDA margin ranging from 25% to 30%.
Key highlights of the transaction include:
Establishing a Leading Presence: The acquisition creates a dominant player in high-tech engineered fabrics and films, contributing to a roughly 20% increase in the revenue of Michelin's High-Tech Materials activities.
Diversification Strategy: Michelin's move into polymer composite solutions aligns with its Michelin in Motion 2030 strategy, aimed at expanding the company's scope beyond mobility.
Synergies and Innovation: Both Michelin and FCG possess unique capabilities that will unlock synergies for deep innovation across a wide range of products and applications.
Positive Financial Impact: The transaction is expected to enhance Michelin's growth profile and is accretive to margins for the Group and its Specialty segment. It will generate positive cash flow and have a positive impact on earnings per share.
Financial Sustainability: The acquisition is financed using available cash, allowing Michelin to maintain its strong financial position.
The acquisition of FCG signifies Michelin's commitment to advancing its position in the polymer composites market and diversifying its portfolio in line with its strategic goals.