Investcorp acquires Synthetic Industries for 0.77 times revenue

Weekly Corporate Growth Report, Nov 29, 1999

The Deal: Investcorp, a global investment firm based in Bahrain, has agreed to acquire Synthetic Industries for $33.00 a share in cash, for a total of $283.8 million. In addition, Investcorp will assume $230 million in debt.

Discussion: Synthetic Industries is the No. 2 maker of polypropylene textiles, which are used in carpet backing, in the United States. The company's carpet backing sales are second only to BP Amoco's, and make up nearly half of the carpet backing sales in America. Synthetic Industries also makes construction and civil engineering products and environmental products. The company produces technical textiles including specialty fabrics and industrial yams and fibers. From its seven plants in Georgia, Illinois, and Tennessee, Synthetic Industries sells more than 2,000 products to 65 markets in North America, Europe, and the Far East.

Investcorp is the investment firm credited for reviving numerous companies such as Saks, Tiffany, Gucci, Circle K convenience stores, Simmons mattresses, William Carter children's wear and CSK Auto Parts. Nemir Kirdar, Investcorp's Iraq-born and Chase Manhattan-bred leader, and his management team inject what they refer to as "patient capital" into Western companies. When business improves, Investcorp sells or takes each company public, pays off investors, and pockets its profit -- usually in five years or less. Investcorp has offices in New York, London, and Bahrain. The company's management owns about 38% of the firm.