Invista Inc. said Friday it is exploring strategic alternatives for its Apparel & Advanced Textiles business, a global producer and marketer of premium fibers and fabrics, confirming a report in WWD in November that a sale was being pursued.
Invista, a unit of Koch Industries, said these alternatives include potentially selling or retaining and further investing in the business within Invista.
Comprised of a lineup of well-known, global consumer brands — including Lycra and Coolmax fibers — the business specializes in performance materials used in apparel with a presence in every major region of the world.
“A key element of our market-based management business philosophy is to continuously assess the external value of our assets against our internal value to make sure that the asset is owned by the company that values it most highly,” said Jeff Gentry, chairman and chief executive officer of Invista, headquartered in Wilmington, Del.
“The apparel business is a strategic part of our portfolio,” Gentry said. “We are extremely pleased with the results of the business and remain confident in its continued and future success. We are simply considering all available options. In the event that no other company values the business more than we do, we will gladly hold the business and continue to invest for the future.”
Invista said further details about the business and exploration process were being kept confidential. It has retained Goldman, Sachs & Co. to assist in exploring strategic alternatives.
A potential sale would come 13 years after Koch bought the business from Dupont for $4.4 billion.
There has been speculation in the market that the unit could be sold in parts, such as a sale of the lucrative Lyrca spandex franchise. South Korean fiber giant Hyosung was said to have conducted due diligence but passed on a deal, at least initially. Lycra and Hyosung’s Creora brand are among the largest spandex makers in the world.
Sources speculated that Koch was looking to divest Invista in order to invest in businesses with more profit potential and less risk. Dave Trerotola, president of Invista Apparel & Advanced Textiles, said in 2015 that Invista represented about 10 percent of Koch’s business, putting its annual sales at about $12 billion. That was on the occasion of a new marketing campaign for Invista’s largest brand, Lycra, the first branded spandex introduced by DuPont in 1958.
With leading brands including Lycra; the temperature-controlling Coolmax; Cordura, the industrial specialist that has been making inroads in denim, as well as home goods brands Stainmaster and Antron, Invista, one of the world’s largest integrated producers of chemical intermediates, polymers and fibers, has been expanding its capacity around the world and seems well-positioned for growth. It may be seeing challenges, though, including flat fiber prices and global economic challenges.
The company’s technologies for nylon, spandex and polyester are used to produce apparel, carpet, car parts and other everyday products. Invista has operations in more than 20 countries and has about 10,000 employees.
Chemical giant DuPont changed the name of its Textiles & Interiors unit to Invista in 2003. In 2004, DuPont sold Invista to Koch Industries for $4.4 billion in cash and merged it with its KoSa polyester unit, creating what at the time was an $8.4 billion synthetic fiber company. Invista has recently been expanding in China, including the opening of a large nylon manufacturing plant at the Shanghai Chemical Industry Park that includes a 215,000-ton hexamethylene diamine plant and a 150,000-ton polymer facility, and deals with such firms as China Prosperity.
Invista also has an Applied Research Center in Newark, Del.
The privately held Koch is owned by the brothers Charles and David H. Koch, who are said to have a net worth of $49.6 billion each. The company has 100,000 employees in 60 countries, owning such firms as Georgia-Pacific, Flint Hill Resources, Molex and Koch AG & Energy Solutions, Chemical Technology Group, Minerals, Pipeline and Supply & Trading.
The potential sale would follow another big deal this fall when Platinum Equity purchased International Textile Group, owner of Cone Denim and Burlington Worldwide. In the transaction, a newly formed Platinum Equity affiliate merged with and into ITG, with ITG continuing as the surviving corporation and as a privately held Platinum Equity portfolio company.
ITG was founded in 2004 by investor Wilbur L. Ross, when he merged Burlington Industries and Cone Mills. The timing of the sale coincided with Ross being considered and eventually named Commerce Secretary.