Coats Group to raise £250 million for OrthoLite acquisition

LONDON - Coats Group plc (LSE:LON:COA), the industrial thread and footwear component manufacturer, announced Wednesday its plan to raise approximately £250 million through an equity placing to partially fund its acquisition of OrthoLite Holdings LLC.

The company has signed a definitive agreement to acquire OrthoLite, a premium insole manufacturer, for an enterprise value of $770 million. The acquisition aims to strengthen Coats’ position in the footwear components market.

The capital raise will consist of a non-pre-emptive placing of new ordinary shares, a retail offer, and director subscriptions. The company’s directors and management intend to participate in the placing to an aggregate value of approximately £500,000.

BNP PARIBAS and Peel Hunt LLP are acting as joint bookrunners for the placing, while Lazard (NYSE:LAZ) & Co., Limited serves as financial adviser for the acquisition and capital raise.

The remainder of the acquisition’s cash consideration will be funded through new debt facilities with Coats’ existing lenders. Following completion of the transaction, the company expects its proforma net leverage to be approximately 2.2x by December 31, 2025, and to fall below 2x by the end of 2026.

The placing is subject to admission of the new shares to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange (LON:LSEG)’s main market. Admission is expected to take place on or before 8:00 a.m. on July 21, 2025.

The capital raise is not conditional upon shareholder approval or completion of the acquisition. If the acquisition does not complete, the company intends to invest the proceeds on a short-term basis while evaluating other uses, which may include other acquisition opportunities or a return of capital.

This information is based on a press release statement issued by Coats Group plc.

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