Austell, Ga.—AFFC Holdings, a newly formed company sponsored by an investor group comprised of The Sterling Group, Genstar Capital and Laminar Direct Capital, has reached an agreement with BP to acquire the company’s Amoco Fabrics and Fibers subsidiary, along with its associated assets. As with other Sterling, Genstar and Laminar investments, management of the purchased company will also be participating significantly in the ownership of the newly independent organization. AFFC Holdings has not yet selected a name for the business. The transaction is expected to be finalized in the fourth quarter of 2004.

Financial details of the transaction are not being disclosed. Headquartered in Austell, Ga., BP’s Fabrics and Fibers subsidiary is a leading producer of synthetic fabrics throughout the world, and is the world’s number one producer of primary carpet backing and secondary carpet backing and also is a leading producer of synthetic fabrics for use in furniture, bedding, automotive, geotextile and other industrial fabrics applications, noted John Dowdell, director of sales and marketing for BP Carpet Backings, AFFC. The company also operates manufacturing facilities in five locations in the southern United States, and internationally in Mexico, Germany, Hungary and Brazil.

“This will be a complete exit for BP from the carpet and other textile industries that we supply,” he said. “We will actually have a new company name that will be announced in the next few weeks.” Dowdell noted, BP had been looking to divest itself of the fabrics and fibers subsidiary for quite some time, but due to 9/11 and subsequent economics conditions was not able to until now. “Actually, BP went through a portfolio review back in late 2000 and it was announced at that point in time that it would be divesting itself of the fabrics and fibers business unit because it fell outside its area of strategic focus.

“We initially went to market in 2001,” he explained. “The bids for the business actually came due right around 9/11. At that time, the economy took a turn for the south and BP felt like it would be in a position where it might have to discount the business to sell it. With a good healthy business, it felt the timing just wasn’t right at that time within the general economy, so it made the decision to pull the company from the market but it was very consistent in its message that its intent was to divest the business when the economy showed signs of improvement. “This year,’ he added, “all the factors aligned to make it a good time to take the business back to market and that’s why it is being sold now, although it is actually a strategy that has been in place for a number of years.”

Regarding the future of management as well as the company’s workforce, Dowdell stated, “As far as I know, the business will remain intact and there will be no impact on employees. They [may be] still in the process of [going over] some specific individuals’ situations, but it is our expectation that the management team will remain intact and that there will be no loss of jobs related to this transfer of ownership.” William Oehmig, principal of The Sterling Group, said, “We are pleased to have the opportunity to invest in this business alongside management, Genstar and Laminar. We look forward to working with the dedicated and talented management team to grow this newly independent company.

“We believe this company’s strong management team and employee base, leading positions in attractive markets, consistent financial performance and its status as a newly independent entrepreneurial organization,” he explained, “offer exciting opportunities for the future of the company and make the company an ideal fit with the investment philosophies of Sterling and our co-investors.” Bradford Mortimer, president of BP’s Fabrics and Fibers business said, “The business is excited to team with Sterling, Genstar and Laminar. We believe that competing in our marketplace as an independent company opens the door to pursue many new and energizing opportunities.

Our primary focus will be on serving the needs of our customers, and we will continue to look for ways to better serve their needs in the future. We have a lot of opportunities ahead, and our new sponsor group will be an excellent partner in pursuing those prospects.” “One of the critical aspects of evaluation all these firms make when they look at a potential acquisition candidate [such as BP] was our position in the marketplace in terms of our level of service engagement within our traditional markets,” said Dowdell. “We are committed to maintain our positions there and there certainly are aspirations to grow the business as we move forward. We are currently working on a number of potential product development initiatives which we anticipate will give us those opportunities to grow.

“Beyond that,” he added, “the new ownership will give us the opportunity to assess acquisitions that may be synergistic with our business and perhaps to branch into a broader use of synthetic fibers other than polypropylene. While this is not 100% of our current production, it certainly is the core of it and that was our strategic fit within the Amoco organization and, ultimately, BP when BP acquired Amoco.” “We believe this company is well-positioned to create and to take advantage of new opportunities in this market,” said Jean-Pierre Conte, chairman/ managing director of Genstar. “With its deep knowledge and industry expertise, the company’s management team has demonstrated the customer-focused business savvy and leadership skills necessary to drive the growth and profitability of its company.

“We feel confident Genstar, Sterling and Laminar’s experience supporting and growing newly independent organizations will be a valuable asset to this company,” he concluded. “We look forward to working closely with the management team and our co-investors as the company continues to excel as the market leader.” Financing for the transaction is being provided in part by BNP Paribas. Credit Suisse First Boston LLC advised BP PLC on the transaction. For more information on BP Carpet Backings, AFFC, call 706/275-9670.