Industrial thread and global footwear component manufacturer Coats Group has completed a capital raise to the tune of around £246 million that will go to part-funding a just-announced major acquisition.
Coats has just bought US insole maker OrthoLite Holdings for $770 million (£575 million), “aiming to accelerate its growth strategy in the footwear industry”. The transaction, which is subject to customary regulatory clearances, is expected to close in the fourth quarter.
It said the acquisition is expected to enhance Coats’ market position by integrating OrthoLite’s premium insole technology and leveraging synergies to improve financial performance, with significant cost savings and growth opportunities anticipated by 2028.
OrthoLite, founded in 1997, holds around 36% market share in open-cell foam insoles, supplying over 500 million pairs annually to around 550 brand customers. The company operates 14 production facilities globally and has more than 310 co-branding agreements.
In a positive earnings release in March, Coats talked of “exciting medium-term targets” and… “investments to drive long-term growth initiatives.”
Back to the funding, which Coats said had strong support from shareholders, some 314.8 million new Ordinary Shares have now been placed by BNP Paribas and Peel Hunt at a price of 77p per Placing Share with institutional investors.
In addition, retail investors have subscribed for a total of 3.85 million new Ordinary Shares at the Placing Price. Certain directors and company management also participated in the Placing for a total of 902,595 new Ordinary Shares at the Placing Price.
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