Südwolle Group, a leading global producer of worsted yarn for circular and flat knitting and weaving, in pure wool and wool blends, announced today that it has signed an agreement to acquire a 100% stake in Safil S.p.A. as well as an 80% stake in Gruppo Tessile Industriale (GTI) S.p.A., both Italian based worsted yarn manufacturers.

The shares are being acquired from Finsavio S.p.A., a holding company for 100% of Safil shares and 50% of GTI shares, as well as from the founder and CEO of GTI, Alberto Frignani, who currently holds 50% of GTI shares.

As a result of the transaction Mr. Frignani will remain a 20% shareholder in GTI and he will continue to lead GTI as CEO. Alberto and Cesare Savio, the sons of Safil founder Fernando Savio and owners of Finsavio S.p.A., will continue to support the future growth path of Safil as an individual unit under the umbrella of Südwolle Group: CEO Cesare Savio will continue to lead the company and CFO Alberto Savio will continue to advise the company.

The parties agreed on confidentiality concerning financial details of the transaction.

In a press statement today, the company said: “With these complementary acquisitions, Südwolle Group enhances its product range and capability to address client needs in customized, fashion, luxury as well as non-apparel segments. Furthermore, the group will increase its footprint in the European and especially in the important Italian yarns market. Both Safil and GTI are established family businesses that currently generate the majority of their turnover in Italy. With the global reach and the financial strength of Südwolle Group as a reliable industrial partner, Safil and GTI will be able to enter their next phase of growth, expanding within and beyond Europe.”

Based in Schwaig near Nuremberg, Germany, independent family owned Südwolle Group, whose roots date back to 1918, covers the complete yarn value chain from the sourcing of raw materials to treatment, spinning and dyeing.

It has six principal brands: Südwolle (weaving yarns), Biella Yarn (flat knitting yarns), Yarn in Motion (circular knitting yarns especially for the outdoor sector and functional clothing), Richter (yarns for hosiery), Stöhr (yarns for technical applications, e.g. for automotive, upholstery and corporate) and Soey (Air Jet yarns). With production facilities in Germany, Poland, Romania and China, Südwolle Group employs more than 2,300 people worldwide. Südwolle Group combines a worldwide yarn spinning capacity of 21,000 tons p.a., a dyeing capacity of 8,000 tons p.a. and a wool top treatment capacity of 7,000 tons p.a. Its products are ranging from large volume standard yarns to highly customized yarns.

Traditionally, Südwolle Group was focused on large volume orders of standard yarns. Over the past decades, the group has diversified its business model and branched out into customized yarn segments, developing into a one stop shop for its customers. In fiscal 2014, Südwolle Group posted revenues of € 340 million. With ca. 85% of revenues, the main customers of the group are suppliers to the apparel industry – both fashion and non-fashion, such as work wear. The other ca. 15% of revenues are generated with non-apparel products, such as yarns for seat covers for the automotive, airline, railway and furnishing industry.

Safil, based in Gaglianico in Italy’s Biella province, is a renowned supplier of worsted yarns for knitwear (outwear, underwear, jersey), weaving (apparel and upholstery), hosiery, protection clothing and sportswear and has shown steady growth over the past years.

While the company’s main customers are also suppliers to the clothing industry, it traditionally focuses on different, usually more customized segments than Südwolle Group as well as non-clothing segments. With approx. 700 employees and production facilities in Italy and Bulgaria with production space of almost 60,000 square metres, the company has a yearly spinning capacity of ca. 7,000 tons and a cone dyeing capacity of ca. 4,000 tons per year. In 2014, Safil posted revenues of more than € 90 million.

GTI, based in Verrone in Italy’s Biella province, develops, manufactures and commercializes worsted and woolen yarns for the weaving and knitwear industries, focusing on small productions of high-end yarns for suppliers to the luxury fashion industry. GTI has approx. 50 employees, a yearly spinning capacity of ca. 200 tons and production space of ca. 5,500 square metres. In 2014, GTI posted revenues of more than € 10 million.

Klaus Steger, CEO of Südwolle Group, said: “Safil and GTI are established players in their respective segments with significant international growth potential that we want to realize together with their experienced management teams. In line with our strategy to focus resources on our spinning businesses, increase our scope of products and expand our geographic reach, both firms are an excellent strategic fit for our business. Our clients will benefit from our group’s enhanced know-how and product offering in the global yarn market as well as our strengthened footprint in Europe and Italy. We look forward to working with Cesare and Alberto Savio and Alberto Frignani who share our commitment to quality as well as modern corporate governance and welcome them together with all Safil and GTI employees to the Südwolle Group.”

Cesare Savio, CEO and Managing Director of Safil, said: “Südwolle Group is an ideal strategic partner for Safil as it will enable our company to increase its global reach and access customers and sourcing facilities within Europe and beyond”.

Alberto Frignani, CEO of GTI, added: “I am convinced that GTI, thanks to its new partner Südwolle Group, will be in an excellent position to develop its unique know- how in natural fibers and its product innovation potential, and I am excited to lead GTI in this new phase of its growth path”.

The closing of the transaction is expected within the coming weeks.

www.suedwollegroup.com