Xerium Technologies, a manufacturer and supplier of machine clothing and roll covers for the paper and packaging industry, is reviewing strategic alternatives for maximizing shareholder value.
The alternatives may include the divestment of the company or its divisions and/ or selected assets in separate transactions or a strategic merger, a Reverse Morris Trust transaction, or other business combination.
TN Capital Advisors has been appointed as financial advisor and Latham & Watkins as legal advisor to assist Xerium in the process.
Xerium Technologies president and CEO Mark Staton said: “Our people have done a great job of completing this complex asset restructuring.
“We are now a company with high quality assets in regions around the world poised for growth, with 75% of our product sales in markets for growing grades of paper and packaging.”
Xerium Technologies chairman of the board James Wilson stated that the company’s market is stable and with an expected EBITDA to capital expenditure ratio of about seven times, Xerium is on a path to increase shareholder value through debt reduction.
But presently, the company has an expensive debt that could be refinanced on better terms and also suffers from poor stock trading liquidity.
At this point, the board has determined that there could be opportunities to speed up value recognition or to unlock additional value through strategic actions and this is the right time to identify and evaluate such options for the shareholder.
The company’s board also stated that presently, there can be no assurance given, about the result of the strategic review or any assurance about the outcome or the timing.
It also does not intend to reveal or comment on developments related to this review unless and until the board has approved a specific transaction.
Xerium designs, engineers, manufactures and installs machine clothing and roll covers for paper and packaging manufacturers.