Essentra buys out Dubai joint venture partner in £11.6m deal
By Josh White
Date: Tuesday 19 Mar 2019
(Sharecast News) - Essentra announced the acquisition of the 49% minority interest in its filters joint venture, Essentra MEA, from Aberdeen International, which is part of the BBM Bommidala group.
The FTSE 250 firm said the acquisition carried a cash consideration of £11.6m.
Essentra MEA is the holding company of Essentra FZE, which undertakes the company's filters activities in Dubai.
Since it was established in 2013, Essentra FZE had served the attractive markets of the Middle East with an "increasingly complex" range of special filters, the board explained, which had resulted in strong revenue and profit growth.
As the region continued to expand, Essentra said 100% ownership of Essentra FZE would allow it to further invest in additional capacity and to introduce new processes and products in Dubai, and to fully benefit from future potential volume and premiumisation opportunities.
"In successful partnership with BBM, Essentra FZE has grown considerably over the last six years as the demand for the special filters in the Middle East has increased," said chief executive Paul Forman.
"As this market trend is expected to be maintained, the acquisition of BBM's minority stake in the joint venture will allow us to expand the Dubai facility into a regional hub and to capture the full potential of this growth region for the benefit of Essentra shareholders."
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