This week, Canadian institutional investors Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ announced that have invested in a transaction that will see Solmax, the world’s largest maker of so-called geosynthetics that shield toxins from contaminating soil, water and air in landfill and mining operations, acquire TenCate Geosynthetics, a Dutch-owned maker of geosynthetics and industrial textiles. Price and other deal terms of the transaction were not disclosed.
Both CDPQ, which manages a portfolio of CAD 365.5 billion (just over $290 billion) assets on behalf of Canadian pensions and insurers, and Fonds de solidarité FTQ, which manages around $15.6 billion in client assets through private equity and venture capital investments, have been invested in Solmax for many years (FTQ for more than two decades).
A “game changer” in geosynthetics
“This is the joining of two leading companies in their respective segments, recognized globally for the quality of their products and services, that are bringing their geosynthetic products together under the same roof for the first time,” Solmax President Jean-Louis Vangeluwe said in an official statement. “This transaction will increase their products’ use in civil engineering, road infrastructure, hydraulic and environmental works. The size, capacity for innovation, geographic reach and resources of the new organization will further enhance the… position of geosynthetics as important products in the construction sector.
“This is a game changer in the history of geosynthetic manufacturers that develop lesser-known engineered products that are essential to protecting the environment and developing infrastructure projects,” Vangeluwe added.
“I am highly pleased to position our company alongside Solmax. We both are among the leaders in our respective segments and now we will join together to create a stronger global leader in geosynthetics. The long-term vision of Solmax around sustainability aligns very well with that of TenCate Geosynthetics, and I am energized to lead my team confidently into this new business environment where we can contribute even more value together”, said TenCate Geosynthetics CEO Wally Moore.
Within the $15 billion geosynthetics market, Solmax has built its dominant market position through the production of polyethylene (PE) geomembranes, used as containment solutions in over 60 countries. These membranes are used by major industrial companies in the mining, energy, waste management, water, and civil engineering sectors, protecting soil from contamination in landfills and in the tailings and heap leach pads of mining operations in environmentally fragile ecosystems.
A mega fish-farm in Egypt
Last November, Solmax provided 3 million square meters of PE geomembrane to line the canals of a major aquaculture project in East Port Said, Egypt. The project includes construction of a hatchery for fish and shrimp on 4,000 acres of land, which will be supplied with fresh sea water by a system of constructed canals lined with Solmax product to ensure the integrity of the canals, the pond system, and the surrounding environment.
Twenty thousand acres have been set aside for this Egyptian mega-project, which is being managed by Egypt’s state-run Suez Canal Fish Farming and Aquaculture Company. The project aims to supply up to 70 percent of Egypt’s domestic demand for fish, contributing to food security, job creation, and economic growth.
For its part, TenCate Geosynthetics makes industrial textiles–including the geogrid fabrics used in retaining walls, as well as the elongated geotextile tubes used in sewage treatment. The product is widely used (if perhaps under-appreciated) in infrastructure, transportation, building sites, water management, natural resources, and environmental market applications. The firm is also active in the agricultural, horticultural, recreational, and other industrial verticals. TenCate Geosynthetics supplies its products to 100 countries from nine production locations around the world.
“A transformative acquisition”
“CDPQ is proud to further support Solmax in a transformative acquisition that will enhance its position as a global industry leader. Since our initial investment, Solmax has enjoyed rapid expansion through organic growth and acquisitions, resulting in a tenfold increase in size in less the four years. I would like to commend the management team’s excellent work, vision and exemplary integration ability, as well as the Board of Directors for its support throughout this growth plan,” said Kim Thomassin, Executive Vice-President and Head of Investments in Québec and Stewardship Investing at CDPQ.
“The Fonds de solidarité FTQ has been supporting Solmax for the past 25 years. Once again, we are proud to invest in the company’s international growth, allowing Solmax to strengthen its position as a global leader in the geomembrane market. Thanks to founder Jacques Côté’s vision, CEO Jean-Louis Vangeluwe’s leadership, and the expertise of its teams, Solmax is proof that protecting the environment and good quality jobs can go hand-in-hand. Following the acquisition of TenCate, Solmax will offer even more innovative products that shield the soil, water and air from toxins and pollutants,” said Fonds de solidarité FTQ President and CEO Janie Béïque.
“I’m delighted to see the family grow again. The addition of TenCate Geosynthetics to Solmax will have a positive overall effect on the geosynthetics sectors. Together, with our products, services and available resources, we will be able to make an impact on the quality of lives of individuals and society as a whole,” added Solmax Founder and Executive Board Chairman Jacques Côté, who took a moment to warmly acknowledge the support of CDPQ and Fonds de solidarité FTQ in the transaction:
“They are two long-term partners that are always there for our business-transforming projects,” he said.