July 4, 2016

Low & Bonar, the international performance materials group with leading positions in niche industrial markets, has agreed to dispose of its artificial grass yarns production business (comprising the majority of its Sports & Leisure global business unit), for a cash consideration of €27.0m on a cash-free/debt-free basis to the Mattex Group (the "Disposal").

The Mattex Group is a major global business-to-business polymer-based, synthetic materials group, focused on the production and supply of carpet backing solutions for the carpet industry and with a leading global position in the supply of grass yarn.

The Disposal will comprise the sale of Bonar Emirates Technical Yarns LLC ("BETY"), the Group's Abu-Dhabi-based grass yarns production facility, and the main production assets and the trade working capital of the grass yarns business in both Europe and the United States, together with certain assets from the other subsidiaries which comprise the Sports & Leisure business unit. The Mattex Group will not acquire the Group's Dundee factory, which will remain with Low & Bonar and continue to provide the base for the Group's carpet yarn manufacturing business.

The Disposal is expected to complete no later than 31 August 2016, subject to the fulfillment of a number of conditions, including the satisfactory completion of an information and consultation process with the employees affected by the Disposal, which will commence later today.

Low & Bonar's grass yarns business has undergone extensive restructuring in recent years and is now profitable with improving operating margins. Despite these measures, the returns to the Group from Sports & Leisure remain low when compared with its other business units and the potential for significant further improvement is limited in the near term. As such, the Disposal is in line with Management's stated aim of achieving and maintaining at least 10% operating margins in all its global business units and exiting businesses unable to reach that threshold as part of the Low & Bonar group. The net proceeds of the Disposal will be used to reduce the Group's net borrowings and provide flexibility and headroom to fund more profitable and cash-generative opportunities. It is anticipated that the Disposal will be marginally dilutive to the Group's earnings per share in the current financial year but improve the quality of business and Group margins.

In the year to 30 November 2015, Sports & Leisure had revenues of £38.3m and operating profit of £1.2m (giving an operating margin of 3.1%). The grass yarns share of that revenue was approximately 88%.

The consideration payable for the Disposal is estimated to amount to €24.1m (based upon the estimated cash and debt in the business at completion), and will be paid in cash upon completion. In addition, the Group will see the repayment of indebtedness of approximately £10.8m owed by BETY to the Group. It has been agreed that the business will transfer with a target trade working capital and the consideration will be adjusted to the extent that working capital at completion differs from the target. The gross assets the subject of the Disposal amounted to £30.8m at 30 November 2015.

The Group will update the market with its interim results on 6 July 2016.

Brett Simpson, Group Chief Executive, commented:

"We are determined to actively manage our portfolio of businesses and products to deliver and sustain high-quality earnings across the group. This disposal shows our commitment to this strategy.



Proposed Takeover of Low & Bonar Plc

Freudenberg Submits offer for Low & Bonar PLC

For further information, please contact:

Low & Bonar PLC
Brett Simpson, Group Chief Executive Officer   
Mike Holt, Group Chief Financial Officer 

020 7535 3180

Instinctif Partners
Matthew Smallwood                                            
Helen Tarbet

020 7457 2020


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