Trelleborg Bags Another M&A in 2022

Trelleborg Group recently announced an agreement to acquire United States-based company, Minnesota Rubber & Plastics, a manufacturer of polymer and thermoplastic components and a system provider of technically demanding applications. The Swedish company reported that the agreement is for $950 million USD (approximately SEK 9.5 billion) on a cash and debt free basis. If a tax asset of approximately SEK 900 million (over $82 million USD) is taken into account, according to a press release announcing the acquisition, the purchase price amounts to approximately SEK 8.6 billion (over $791 million USD).

“Minnesota Rubber & Plastics complements and strengthens Trelleborg's current position and product offering in a number of fast-growing industries,” said Peter Nilsson, president and CEO of Trelleborg. “The company is a very good fit with our own business within precision seals, and the transaction is expected to generate significant synergies in terms of lower costs and higher production efficiency. Minnesota Rubber & Plastics will gain access to Trelleborg's global sales channels, and it will be able to offer our wider range of seals to its existing customer base in North America. All in all, this is expected to lead to extensive cross-selling opportunities.”

“Minnesota Rubber & Plastics is well-known to us for being an innovative and customer-oriented company,” said Peter Hahn, president of the Trelleborg Sealing Solutions business area. “The acquisition makes us the natural development partner for sealing solutions for both local and global customers. The company's new state-of-the-art innovation center enables accelerated product development and strengthens us in R&D and areas such as healthcare & medical.”

In 2022 alone, Trelleborg’s M&A has included MG Silikon GmbH, assets in Parklane Textiles, and EirMed, along with the company’s recent announcement of the Minnesota Rubber & plastics buy. MG Silikon is a manufacturer of aerospace components, Parklane is a supplier of reinforcement materials, and EirMed is a manufacturer of technical precision plastic injection-molded components. These acquisitions reinforce the ongoing trend of larger medtech suppliers acquiring smaller suppliers to diversify its portfolio.

For the Minnesota Rubber & Plastics buy, Trelleborg expects the transaction to be finalized before the end of 2022.

“Initially, the EBITA margin of Trelleborg Sealing Solutions will be slightly diluted. However, as we extract synergies, the business area's EBITA margin is estimated to be back at its current level within a couple of years,” Nilsson said. “We therefore expect that the acquisition multiple will gradually drop to approximately 10x EBITDA including synergies. We have a very good history when it comes to value-creating acquisitions within Trelleborg Sealing Solutions.”