Andritz sees value in Youngsville’s Xerium Technologies

 In August 2018

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Shares of Youngsville-based Xerium Technologies, which makes covers used on rollers in paper and packaging manufacturing, shot nearly 150% higher on June 25 after Austria’s Andritz Group agreed to buy the company for $13.50 per share, or about $833 million, including debt.

It was a surprising outcome for a company that has reported combined losses of $36 million over the previous two years, showed little revenue growth recently and had about $509 million in debt at the end of 2017. But Andritz sees value in Xerium, which was formed in 1999.

Two key company shareholders, New York-based Carl Marks Management and Wynnefield Capital, have approved the transaction, which is expected to close
later this year. They controlled about 20% of the company’s stock as of April 2017, while New York-based AS Investors and Tocqueville Asset Management had a combined 23.5%.

“[Andritz’s] prestigious reputation in our industry, as well as their true global scale, provides a compelling opportunity for our own global workforce,” Xerium CEO Mark Staton said in a release. “I am convinced that Andritz will be a great long-term owner of Xerium.”

Xerium operates 28 manufacturing facilities in 13 countries, including Austria, and has about 2,850 employees. Equipment and services for the pulp and paper industry will continue to be the company’s core business, according to a shareholders letter from Andritz CEO Wolfgang Leitner and Staton.

Xerium reported sales of $481 million in 2017, a 2% increase from the previous year. It had a net loss of $14.6 million last year and $21.6 million in 2016. It has been considering a potential sale for more than two years, hiring an investment bank to help it consider strategic options in late 2014, according to a company filing. Staton joined the company as CEO in April 2017.

Andritz, a publicly traded company, employs more than 25,800 people worldwide and produces machinery for hydropower, metal pressing and pulp and paper production.

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