Südwolle says the deal will enhance its product range. Photo credit: Südwolle Group

Südwolle says the deal will enhance its product range. Photo credit: Südwolle Group

German wool-based yarn supplier Südwolle Group has agreed to acquire Italian yarn manufacturers Safil and Gruppo Tessile Industriale (GTI), a move that will diversify its product portfolio in customised and luxury yarns as well as expand its European footprint. 

The company, which is one of the world's largest spinners of pure wool and wool blend worsted yarns, will acquire 100% of Safil, as well as an 80% stake in GTI.

As part of the deal, Südwolle will increase its footprint in the European yarns market, with both Safil and GTI currently generating the majority of their turnover in Italy. With Südwolle's global reach and financial strength, Safil and GTI expect to enter their next phase of growth, expanding within and beyond Europe. 

The shares are being acquired from Finsavio, a holding company for 100% of Safil shares and 50% of GTI shares, as well as from the founder and CEO of GTI, Alberto Frignani, who holds 50% of GTI shares.

Following the transaction, Frignani will remain a 20% shareholder in GTI and continue to lead GTI as CEO. Safil CEO Cesare Savio will continue to lead the company, and CFO Alberto Savio will continue to advise the company.

Südwolle's produces yarns for the outdoor sector, including functional clothing, as well as hosiery and the automotive market, under brands including Südwolle, Biella Yarn, Yarn in Motion and Richter. With production facilities in Germany, Poland, Romania and China, the group combines a global yarn spinning capacity of 21,000 tons per year, a dyeing capacity of 8,000 tons per year and a wool top treatment capacity of 7,000 per year. 

Last year, Südwolle posted revenues of EUR340m (US$385.1m). With around 85% of revenues, the group's main customers are suppliers to the apparel industry – both fashion and non-fashion, such as workwear.

Safil has production facilities in Italy and Bulgaria, with a yearly spinning capacity of 7,000 tons and a cone dyeing capacity of 4,000 tons per year, while GTI has an annual spinning capacity of 200 tons.

“In line with our strategy to focus resources on our spinning businesses, increase our scope of products and expand our geographic reach, both firms are an excellent strategic fit for our business,” said Südwolle CEO Klaus Steger. 

Cesare Savio, CEO and managing director of Safil, added: “Südwolle Group is an ideal strategic partner for Safil as it will enable our company to increase its global reach and access customers and sourcing facilities within Europe and beyond.” 

Financial details of the deal were not disclosed.