Michelin reaches agreement to acquire Flex Composite Group for an enterprise value of Euro 700 million

Michelin, the French multinational tyre manufacturing company and French PE firm IDI have reached an agreement to acquire Flex Composite Group for an enterprise value of Euro 700 million.

The French auto supplier said that buying the Paris-based engineer of fabrics and films will increase its high-tech materials business revenue by around 20%.

The agreement would enable Michelin and FCG to create a leader in high-tech engineered fabrics and films, and aligns with the Michelin in Motion 2030 strategy. This will mark a significant step forward in Michelin’s strategy of growing its polymer composite activities in adjacent areas, leveraging innovation and R&D capabilities, and benefiting from FCG’s industrial process expertise.

Florent Menegaux, CEO of Michelin, declared: “We are aiming to generate synergies and to push back the frontiers of deep-tech innovation in a wide range of new products and applications. This acquisition is a milestone in our strategy to position the Group as a key player in polymer composite solutions beyond mobility.”

Emmanuel Capriglione, General Manager of FCG, said, “With Michelin, FCG will be able to increase its capacity for innovation, its actions to reduce its environmental footprint, and to provide its customers with more sustainable materials.”

The transaction would be paid in cash and is fully financed through cash at hand, with Michelin’s financial position remaining strong post-transaction.

The transaction is expected to close by the end of Q3 2023, subject to customary closing adjustments and merger control clearances in relevant jurisdictions.

FCG is a European leader in engineered fabrics and films with applications in highly technical markets such as marine, supercars and electric vehicles, sports, or construction. FCG masters a wide range of polymer composite solutions, adjacent to those already developed by Michelin. The company has 400 employees. It primarily operates in Europe, in fast-growing markets with strong demand dynamics catering to high-end customers. In 2022 FCG reported revenues of Euro 202 million. Over the 2015-2022 period, the company delivered an average organic growth of 11%, with 25 - 30% EBITDA margin, the press release noted.