The Urethane Blog

Recticel M&A Activity

Recticel divests from its Proseat Joint Venture in two steps

Recticel announced that it has entered into final agreements whereby it will first acquire the remaining 49 % in its Proseat automotive moulded seat foam joint venture from its Canadian partner Woodbridge Foam Corporation, and subsequently sell 75 % in Proseat to Japanese public company Sekisui Plastics Co., Ltd.

According to the company, the new joint venture between Sekisui (75 %) and Recticel (25 %) will allow Proseat to further expand its customer base and its product portfolio. The agreement between Recticel and Sekisui contains a call option for Sekisui Plastics Co., Ltd. to acquire the remaining 25 % in Proseat from Recticel as from 2019, and a put option for Recticel to sell its remaining 25 % in Proseat to Sekisui as from 2022, at pre-agreed price calculation formulae. Under the terms of these agreements, the Proseat Joint Venture has been valued at an enterprise value of 8.4x the average (2016 – 2018 F) EBITDA. Both transactions (i.e. Recticel/Woodbridge and Recticel/Sekisui Plastics Co. Ltd) are expected to be closed in the course of the first quarter of 2019, and are subject to customary closing conditions, including regulatory approvals.

Proseat was established in 1999 as a joint venture between Recticel (51 %) and Woodbridge (49 %) with the purpose to serve Tier 1 and OEM car manufacturers with moulded seat pads and head- & armrests in polyurethane. Later the joint venture developed complementary activities in lightweight EPP (expanded polypropylene) structural parts for the same automotive sector. The joint venture is active in Europe, headquartered in Mörfelden, Germany, and operates eight manufacturing sites located in the Czech Republic (1), France (1), Germany (2), Poland (2), Spain (1) and the United Kingdom (1) and employs approximately 2,100 people in total. Proseat realised sales of EUR 291 million in 2017.