REG - Coats Group PLC - Completion of OrthoLite acquisition

CoatsAnnouncement

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RNS Number : 4054F  Coats Group PLC  30 October 2025

30 October 2025

Coats Group plc

Completion of OrthoLite acquisition and new divisional structure

 

Coats Group plc ('Coats', the 'Group'), a world leading Tier 2 supplier of
critical components to the apparel and footwear industry, today announces
that, further to Coats' announcements on 16 July 2025 (the 'Acquisition
Announcement') and 29 July 2025 (the 'Further Information Announcement'),
following receipt of all required regulatory clearances, it has completed the
acquisition of OrthoLite Holdings LLC ('OrthoLite'), the global market leader
in premium insoles.

This acquisition strengthens the product portfolio and capabilities of the
existing Coats footwear business through expansion into the attractive, high
growth premium insole segment. OrthoLite is highly complementary, with
significant overlap in customers, route to market and operational footprint,
and opportunities to accelerate growth through innovation and cross-selling.
In addition, the Group is targeting initial annualised joint cost synergies of
$20 million available by 2028, leveraging Coats' experience of delivering
significant value from footwear acquisitions.

For the purposes of UKLR 7.3.3, Coats confirms that there has been no material
change affecting any matter contained in the Acquisition Announcement or the
Further Information Announcement.

To reflect the new profile and scale of the Group's businesses, Coats is
streamlining its organisational structure into two divisions: Apparel and
Footwear. Following the exit from the non-core Americas Yarns business earlier
this year, the remaining Performance Materials businesses are being
incorporated within this new structure as follows:

·      The Personal Protection and Performance Threads businesses (c.80%
of Performance Materials) will become part of the Apparel division, which
Adrian Elliott will continue to lead.

·      The Telecom & Energy business (c.20% of Performance
Materials) will become part of the Footwear division, alongside OrthoLite. The
enlarged Footwear division will be led by Pasquale Abruzzese.

 

This new organisational structure better aligns the divisions and their
underlying technologies and reduces internal operating complexity. The
structural improvements in Performance Materials over the last 12 months,
which have delivered substantial margin progression and a return to organic
growth, will enable the reorganisation to be implemented efficiently. Coats'
external reporting will align to this new structure with effect from the next
financial year, the year ending December 2026.

Current Trading

The Group is also pleased to report that trading through the third quarter at
both Coats and OrthoLite has continued to be in line with expectations. The
Group will release its usual trading update for the four-month period from 1
July to the end of October 2025 on Friday, 7 November 2025.

David Paja, Group Chief Executive, commented:

"The acquisition of OrthoLite is an important step in our strategy to build a
more growth-oriented group and we are delighted to welcome Glenn Barrett and
our OrthoLite colleagues to Coats. We will now press ahead with our plans to
accelerate innovation and sustainability in the footwear industry as we
combine the capabilities of two global leaders in adjacent product
categories."

 

Conference Call

Coats Management will host a presentation for analysts and institutional
investors via webcast at 08:30 today. To access the meeting, please sign up
using the following link: Coats Investor Meeting
(https://www.investis-live.com/coats/68fb7259127f1e000e40fbac/wewwz) . The
webcast can also be accessed via https://www.coats.com/en/investors/results/
(https://www.coats.com/en/investors/results/) .

Enquiries

 Coats Group plc (Investors)                                                                                            Tel: +44 (0) 797 497 4690

 Chris Dyett

 FTI
 (Communications)

 Nick Hasell

 Victoria Hayns

                                                                                                                        Tel: +44 (0) 20 3727 1340

About Coats Group plc

Coats is a world-leading Tier 2 manufacturer and trusted partner for the
apparel and footwear industries. We deliver essential materials, components,
and software solutions that help our customers grow, compete and win.

 

With over 250 years of industry expertise, we're shaping the future of the
apparel and footwear supply chain through insight-led innovation, impactful
sustainability practices, and digital technologies that unlock better product
quality, efficiency and performance.

 

Headquartered in the UK, Coats is a FTSE 250 company and a constituent of the
FTSE4Good Index. In 2024, we generated $1.5 billion in revenue and employed
16,000 people worldwide - all united by a spirit of innovation, quality and
service. Learn more at www.coats.com or follow us on LinkedIn.

 

Transaction Details

 

Coats has acquired OrthoLite Holdings LLC for an initial enterprise value of
$770 million, representing a multiple of 10.0x EV / EBITDA(1), reducing to
less than 8.0x on a post-synergy basis. This includes $20 million of initial
joint annualised cost synergies to be delivered by 2028. There is a further
contingent payment of up to $10 million on 2025 EBITDA performance.

 

Cautionary statement

 

Certain statements in this full year report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations
will prove to have been correct. Because these statements contain risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. We undertake no obligation to
update any forward-looking statements, whether as a result of new information,
future events or otherwise.

 

(1)EBITDA is LTM adjusted.

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