The acquisition is subject to due diligence, corporate approvals, agreement on final transaction documents and approval of Tearfil’s restructuring plan. Completion is targeted for the first quarter of 2027.
Headquartered in Guimarães, Porto, Tearfil operates as a short staple, cotton-type spinning mill focused on sustainable yarn production.
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The company reported a decline in turnover to €8.57m ($9.75m) in 2025 from €12.94m in 2024, while total fixed assets increased from €3.49m in 2024 to €6.63m in 2025.
The proposed deal would give Spinnova dedicated yarn development and spinning capabilities for its SPINNOVA fibre, which is produced from wood pulp and waste streams.
The company said bringing those activities into Spinnova could “shorten development cycles” and increase control over the conversion of fibre into yarns and textile applications.
In addition, the arrangement is intended to support commercialisation with brands and supply chain partners.
Spinnova CEO Janne Poranen said: “Tearfil has been an important partner for Spinnova, playing a key role in advancing SPINNOVA fibre toward commercial applications. Bringing these capabilities into Spinnova would strengthen our ability to support broader adoption of SPINNOVA fibre and advance the commercial scaling of our technology”.
The LoI sets out an initial purchase valuation of €500,000 for all shares in Tearfil. The consideration would be paid through a combination of cash and Spinnova shares, although the agreement does not establish an obligation for Spinnova to complete the acquisition.
Except for provisions specifically stated to be binding, the letter remains non-binding. Spinnova said it would proceed only if the transaction conditions were satisfied.
Under the proposed framework, Spinnova would provide Tearfil with a €1.5m bridge loan to support Tearfil during a court-supervised process to restructure its debts.
The Portuguese court-supervised procedure is intended for companies facing financial difficulty but not yet insolvency, allowing them to negotiate a recovery plan with creditors while continuing to operate.
The loan remains subject to definitive documentation and other applicable conditions.
Spinnova expects to finalise the arrangement in the coming weeks. If completed, it would carry interest at 12-month EURIBOR plus 2% and mature one year after payment.
The loan agreement would include early repayment triggers if Spinnova decides not to continue with the acquisition.
The proposed funding would be used for working capital and ordinary-course operating requirements, subject to Spinnova’s approval. It is also intended to benefit from available protections under Portuguese insolvency and restructuring law, alongside guarantees in Spinnova’s favour.
Completion of the acquisition would require satisfactory due diligence, approval from Spinnova’s board, final approval of Tearfil’s PER plan, agreement on definitive transaction documents and other transaction protections acceptable to Spinnova.
