The Austrian engineering company Andritz AG (VIE:ANDR) has signed a deal to acquire Xerium Technologies(NYSE:XRM), a US manufacturing supplier, in a cash deal valued at US$833mln.
The deal will pave the way for Andritz, which supplies plants and equipment for hydropower stations as well as the pulp and paper industry, to build up its foothold in the paper industry, which Xerium provides with services and supplies.
“With Xerium, we will be acquiring a high-tech global supplier providing essential services and wear parts to the paper industry,” said Wolfgang Leitner, president and chief executive of Andritz.
Andritz will acquire Xerium, which is based in North Carolina, for US$13.50 per share in cash and the US$833m deal includes net financial liabilities of about US$590mln
Investors are welcoming the tie-up. Andritz shares are up 3.5% at €44.32 in the afternoon trading session in Europe while Xerium shares have more than doubled in pre-market trade to US$13.27.
The agreement has been approved by Xerium’s board of directors, but it is subject to the approval of its shareholders as well as customary closing conditions.
Xerium is a manufacturer and supplier of machine clothing such as forming and drying fabrics as well as roll covers for paper, tissue and board machines. It operates 28 production facilities and has a site in Gloggnitz, Austria.