Koch Industries, based in Wichita, Kan., has agreed to purchase Invista, formerly DuPont Textiles and Interiors, from DuPont for $4.4 billion. According to published reports, the deal, subject to federal regulatory approval, is the largest one in the history of privately held Koch Industries.
The deal, which was inked Nov. 17 and is expected to close in early 2004, will place brands well-known to the outdoor and sporting goods industries -- such as Lycra, Coolmax, Thermolite, Cordura, Supplex, Tactel and Stainmaster -- under the Koch umbrella.
Koch is the largest U.S. producer of petrochemicals used to manufacture polyester and also owns another company well-known to the outdoor market -- KoSa. In 1998, Koch acquired a 50-percent interest in KoSa from the German company Hoechst, and acquired the remainder of KoSa in 2001. KoSa, Koch's polyester unit, supplies Polarguard Classic, HV, 3D and other variations to the industry for sleeping bags and garments.
While Koch does not release its numbers, Forbes recently ranked the company number two on the largest privately held company list with annual revenues of $40 billion. Koch has just over 15,000 employees in 30 countries, including 1,850 at its Wichita headquarters.
With the acquisition, Koch will own Invista manufacturing plants in North Carolina, South Carolina, Tennessee, Texas, Georgia, Virginia, Germany, the United Kingdom, Netherlands, Brazil and Singapore. Invista currently reports that it has 18,000 employees worldwide and reported 2002 revenues of $6.3 billion.
It is still not clear how the acquisition will affect the Invista headquarters in Wilmington, Del., KoSa's U.S. headquarters in Charlotte, N.C., or KoSa's international headquarters in Houston.
Jeff Walker, a 19-year veteran of Koch, has been named as head of the new Invista subsidiary after the acquisition is completed. Walker will serve as chairman of the board and chief executive. George Gregory, president and chief executive of KoSa, has been named Invista senior vice president and will report to Walker.
SNEWS View: This is probably the best thing that could have happened to Invista. While Invista generated more than one-fourth of DuPont's reported $24 billion in 2002, it was also the company's least profitable unit, and that led to job cuts and plant closings. For Koch, the company now has yet another logical outlet for its oil and natural gas businesses, both key ingredients in synthetic fibers. Investors have also noted, correctly we believe, that with Koch, Invista should perform better because as a private company, Koch is better able to weather the traditional cycles of the textile business, something a publicly traded company has a much harder time doing.