Coats Group Plc, a global leader in industrial threads and footwear components, has announced it will acquire Cirql and OrthoLite for a total consideration of $770 million, in a move aimed at establishing itself as a “super tier 2” supplier in the global footwear market.
The acquisition gives Coats access to the premium insole segment through OrthoLite, a global market leader in open-cell foam insoles, which holds 36% of the market share and supplies more than 500 million insoles annually to over 500 brands. Founded in 1997 by Glenn Barrett, OrthoLite is recognized for its superior comfort, performance, and sustainability attributes, and boasts more than 310 co-branding agreements across 14 production facilities worldwide.
In addition, Coats is acquiring Cirql, a proprietary foam technology focused on midsoles that uses biodegradable or fully recyclable materials. Cirql has invested over $30 million in its development and holds more than 80 patents. Coats plans to continue Cirql’s commercialization path, expecting operational break-even by 2026, with ongoing costs projected at $1.5 million per quarter.
David Paja, CEO of Coats, said: “The combination of Coats and OrthoLite is fantastic news for both companies and for the footwear industry. It brings together two global leaders with a shared vision for innovation and sustainability.” Glenn Barrett, founder of OrthoLite, will retain a minority stake and continue with the business.
The acquisition will be financed through a mix of new debt facilities and an equity placement of up to 19.99% of Coats’ issued shares, including a retail investor offering. The deal is expected to improve the quality of Coats’ earnings by increasing exposure to its high-growth, high-margin footwear business, with anticipated annualized cost synergies of $20 million by 2028.
