Incorporated: 1999
NAIC: 313210 Broadwoven Fabric Mills
SIC: 2211 Broadwoven Fabric Mills - Cotton; 2221 Broadwoven Fabric Mills - Manmade; 2231 Broadwoven Fabric Mills - Wool; 2299 Textile Goods Nec
Xerium Technologies, Inc., serves the paper manufacturing industry by offering machine clothing products and roll covers. Clothing is an important part of the papermaking process, with components of it running the length of the papermaking machine. Forming fabrics carry wet slurry to form sheets, dewatering devices remove excess water, press felts transport the paper through pressing rolls, and drying fabrics take the paper through the final drying process. Xerium clothing brands include Huyck and Wangner, primarily sold in Asia, Europe, and South America; and Weavexx, mostly sold in North America.
Dozens of rolls are also used in paper production to remove excess water from the slurry and press the slurry through the clothing to form paper sheets. Xerium provides the covers to the large steel cylinders that make up the rolls of the papermaking machine, as well as spreader rolls. The company also provides repair and rebuilding services.
Roll technology brands include Stowe Woodward, sold in most of the world; Mount Hope, sold primarily in North America and South America; and Robec, found primarily in Europe. With its headquarters in Youngsville, North Carolina, Xerium is a public company with global reach, listed on the New York Stock Exchange. The company maintains 11 roll plants in North America, ten in Europe, one in South America, and licensees in Australia, India, and Korea. Three clothing plants are found in North American cities, four in South America, five in Europe, and single plants in Australia and Japan.
Xerium Takes Shape: 1976
Xerium grew out of the holdings of United Kingdom conglomerate BTR, plc, which in 1976 began to assemble what would become Xerium with the acquisition of Massachusetts-based roller companies Mount Hope Machinery and Stowe Woodward, Inc. The BTR initials stood for British Tyre and Rubber Company, a name taken in 1934 by the British subsidiary of B.F. Goodrich Company after it acquired a sister subsidiary in Denmark. In 1936 BTR established a relationship with Stowe Woodward to produce "Stonite" printing rollers. Over the next 30 years BTR acquired sports equipment manufacturer A.G. Spalding & Brothers and became involved in packaging materials, the production of hoses, and polyurethane insulating foam.
BTR was not an especially distinguished company until Owen Whitley Green took over as chief executive officer in 1967 and initiated an acquisition spree that grew the company into one of Great Britain's most celebrated conglomerates, focusing on industrial companies to serve niche markets with high-quality products. Paper machine products fit nicely into that model, and both Mount Hope and Stowe Woodward were well-established companies in the field, serving as a foundation for the BTR Paper Technology Group.
Mount Hope was founded in Taunton, Massachusetts, in 1941 to serve the textile industry with weft straighteners and cloth guiding systems. The company moved into the papermaking business in 1945 when it developed the first bowed roll in North America. Mount Hope steadily expanded its market to cover the entire United States, supported by new plants opened in Massachusetts and Charlotte, North Carolina, and in 1958 established an alliance with a Swiss company to sell its products around the world. After being acquiring by BTR, all of Mount Hope's operations were moved from Massachusetts to North Carolina as the company's brand continued to grow in North America.
Stowe Woodward Formed: Late 19th Century
Stowe Woodward boasted an even deeper heritage. Founded by Newton, Massachusetts, businessman Frederick R. Woodward and his partner in 1886, the company was a rubber and polymer manufacturing company that produced rubber-covered balls and ebonite bowling balls in addition to rubber covers used to extend the life of steel rolls used in the textile and tannery industries. By the mid-1940s Stowe Woodward began making rubber covers for paper manufacturers. Over the next 20 years the company continued to develop innovative technologies and opened new plants across the country to meet increasing demand for its roll cover products, which were also manufactured internationally through licensees. In 1973 polyurethane expertise was added to the company's capabilities through the acquisition of Essex Polymer, and led to additional plant openings in Middleton, Virginia, and Sherbrooke, Canada.
Huyck Acquired: 1980
BTR added to its paper machine products holdings in 1980 with the acquisition of Huyck Corporation, one of the country's oldest machine clothing companies. Its founding dated back to 1870 when the U.S. papermaking industry was just taking shape. The company was founded in Rensselaerville near Albany, New York, and was originally known as H. Waterbury & Co., named for Henry Waterbury. Having learned the business of manufacturing clothing woolens from his father and uncle, Waterbury had come to Rensselaerville in 1860 to open his own woolen mill, using the Hudson River for power. Ten years later he became interested in producing felts for paper manufacturers, strips of material used to squeeze water from slurry and press the material into sheets. The sheets were then laid in lofts to dry but Waterbury devised a way to connect the ends of the felt together to create a loop that permitted the paper to be dried automatically.
Needing a partner with money to invest in the project, Waterbury turned to the son of a local general store owner, Francis Conkling Huyck, who was a good businessman and salesman and disenchanted with life as a shopkeeper. He borrowed $10,000 from his father and became Waterbury's partner in what would become the fourth felt mill to be opened in the United States. When the railroad bypassed Rensselaerville, hindering the mill's ability to compete, the partnership was dissolved in 1878. Waterbury relocated the operation to remote Oriskany, New York, but Huyck decided for the sake of his children's education to stay close to Albany, setting up his own business in the suburb of Kenwood. When Kenwood Mills burned down in 1894 he relocated the business to the other side of the Hudson River in Rensselaer. After his death in 1907 his sons renamed the company F.C. Huyck & Sons, later shortened to Huyck Corporation. It made a major contribution to the paper machine clothing industry in the late 1950s when it found a way to replace the bronze wire that had been traditionally combined with felt to produce paper machine clothing. Instead, Huyck relied on a textile, "plastic wire," that established the modern forming fabric industry.
Also in 1980 BTR acquired the Becker Company of West Germany. For the next several years, BTR Paper Technologies allowed its paper machine clothing companies to operate independently, but then began to act as an industry consolidator. In 1988 Nokia of Finland and Brazil's Nortelas were acquired, followed a year later by the addition of Irga of Italy and Plastex and Boettcher of Germany. Another acquisition, completed in 1990, was Canada's Niagara-Lockport Industries, Inc., which combined a pair of well-established companies, Niagara Wires of Canada, producer of the bronze wires that had once been used in paper machine clothing, and the U.S. firm of Lockport Felts, a dryer felt manufacturer. Niagara had acquired Lockport in 1977 to become a full-line supplier.
BTR merged Huyck and Niagara-Lockport in 1992, renaming the combination Weavexx. Another company, Germany's Wittler, was added to the BTR Paper Technology Group. During the 1990s the Group added to its capabilities. Stowe Woodward developed the PressManager press section management tool, PRAXAIR ceramics cover technology, and SMART roll embedded monitoring technology. Mount Hope engineers met the demand for larger and faster bowed rolls. They developed METROL metal spools capable of withstanding high temperatures; the Vari-Bow method of adjusting the bow for maximum performance; and the Multi-Bow, an automatic system that could adjust the bow while in use. Later in the 1990s Huyck developed hyperpunch technology.
In the meantime, changes were taking place with the parent company. A new CEO, Ian Strachen, took charge, and in the mid-1990s he initiated a plan to bring some focus to BTR's wide-ranging interests, divesting a number of properties over the next few years to concentrate on the conglomerate's core, industrial products. In 1999 Siebe, plc, acquired BTR and the resulting company, which took the name Invensys, plc, became the world's largest controls-automation company, with divisions covering intelligent automation, controls, power systems, industrial drives, and automotives.
Apax Acquires BTR Assets: 1999
The assets of BTR Paper Technology did not fit in with the future of Invensys, and in 1999 the business was put up for sale. Invensys hoped it would bring well over $1 billion but finally had to settle for $819 million from Apax Funds, part of buyout firm Apax Partners & Co. Invensys did, however, elect to retain a 10 percent stake in its former unit. Apax had been founded by Alan Patricof as Alan Patricof Associates in 1969, an early venture capital firm that in the 1970s helped launch Apple Computers.
Apax completed the BTR acquisition in December 1999 and incorporated the business as Xerium Technologies, Inc., which established its headquarters in Westborough, Massachusetts. Under new ownership the company continued to develop technologies and add assets from around the world. In 2000 Stowe Woodward added nanotechnology. In that same year the venerable Germany firm of Wangner GbmH was acquired. It had started out in 1849 as a manufacturer of bronze wire, a product that naturally led to paper machine clothing. It was merged with Huyck to create a major provider of forming fabrics. In 2001 the unit developed Huyper Press Felts, the industry's first permeable press belt, followed in 2002 by Huytexx/Optiply Forming Fabrics, which stitched together two different fabric layers to accommodate the needs of both sides of the papermaking process.
Xerium made further acquisitions in the early 2000s. Italy's Trelleborg AB was added in 2001, followed a year later by Robec Walzen GmbH of Germany. Also in 2002 Apax decided to sell Xerium, hoping to receive $1 billion to $1.25 billion and take a healthy profit in less than two years of ownership. Morgan Stanley was hired to find a buyer. Bids fell short of the desired price, however, and after weighing the offers from three main suitors, Apax changed course, called off the sale, and recapitalized Xerium with $700 million in loans, making possible a sizable dividend for Apax, which continued to own a significant stake in the company.
Xerium Taken Public: 2005
Xerium grew sales from $515 million in 2002 to $586.8 million in 2004. The company was losing money, primarily because the paper industry was undergoing a difficult stretch. Despite high paper consumption, paper prices were disappointing. Like many of its customers, Xerium pursued a cost reduction program. This resulted in the closing of eight plants and the shift of production from two other plants, as well as a reduction in headcount by 370. Despite losing money, Xerium was able to attract the interest of investors and in May 2005 completed an initial public offering of stock, priced at $12 per share. The proceeds were primarily used to pay down debt.
Sales dipped to $582 million in 2005 and Xerium recorded a net loss of $2.1 million. Early in the next year Xerium acquired Atlanta-based Coldwater Covers, Inc., and its Alabama manufacturing facility for $6.8 million. Coldwater Covers, which was folded into the Stowe Woodward operation, produced a wide variety of polyurethane and composite roll covers and bowed rolls. Shortly after the deal was completed, Xerium moved its headquarters from Massachusetts to Youngsville, North Carolina, where just three years earlier a Weavexx plant was closed, although an administrative office had remained open.
In 2006 Xerium began to reap the benefits of its cost reduction efforts. Revenues totaled $601.4 million and the company turned a profit of $29.5 million. The company also appeared to be well positioned to prosper for years to come. Not only was it well diversified in terms of paper sector, customers, and geography, Xerium looked to benefit from an increasing global demand for paper, leading to a greater need for the products the company provided.
Principal Subsidiaries
Coldwater Covers, Inc.; Huyck Limited; Robec Walzen GmbH; Stowe Woodward LLC; Wangner AB.
Principal Competitors
Polymer Group, Inc.; Dyersburg Corporation; Culp, Inc.; CMI Industries, Inc.
Further Reading
"History of the Rensselaerville Grist Mill," http://www.uhls.org/NICH/RvGristHist.htm.
Kosman, Josh, "Apax Calls Off Xerium Sales," Daily Deal, October 16, 2002.
------, "Apax Hires Morgan Stanley to Sell Xerium," Daily Deal, April 16, 2002.
Larsen, Peter Thal, "Invensys Sells Paper Side for $810m," Financial Times, October 14, 1999, p. 26.
"The Logic Behind Pulling a Conglomerate Apart," Independent (London) September 12, 1997.
Parker, Vicki Lee, "Textile Maker Moves Headquarters to Familiar Youngsville, N.C., Area," Raleigh (N.C.) News & Observer, February 24, 2006.
Vennochi, Joan, "BTR's Checkered Past," Boston Globe, March 27, 1990, p. 39.
— Ed Dinger
