Zotefoams plc (LON:ZTF), a world leader in high-performance foams, has announced the acquisition of Verttec LLC, a manufacturer of technical roll foams based in East Greenville, Pennsylvania, USA, for total consideration of up to US$7.3m.
Zotefoams, through a newly incorporated wholly owned subsidiary, Zotefoams US Holdings Inc., has acquired the entire issued equity of Verttec on a cash-free, debt-free basis for initial consideration of US$5.1m, subject to customary adjustments, with up to a further US$2.2m payable over 24 months, subject to the revenue performance of the business and other performance criteria being delivered. The Acquisition has been funded from the Group’s existing cash resources and debt facilities.
The Acquisition adds specialist crosslinked roll foam capability to the Group. This product format and manufacturing process, which have attractive applications in all three of the Group’s target market verticals, are distinct from both the Group’s non-crosslinked and block foams produced at OKC in Spain and the block foams manufactured in the UK, the US and Poland.
The Group estimates that organic investment to replicate Verttec would cost approximately US$20m and take five years to complete. Together with the Group’s block foam manufacturing capability in Kentucky, the Acquisition enables North American converter customers to source both formats of technical foam from a single US-based supplier.
About Verttec
Verttec is a family-owned business. Robert Dempsey Jr. founded it after building and selling a US adhesive tape business. He saw a shortage of flexible, converter-focused suppliers of crosslinked polyethylene and EVA roll foam in North America. Verttec’s production process was developed in-house with former industry engineers and is designed for thin-gauge, technically demanding applications. His son, Ryan Dempsey, is President and has led the business’s commercial growth.
Verttec is based in East Greenville, Pennsylvania, where it manufactures crosslinked polyethylene and EVA foams in continuous rolls as thin as 0.3mm. Its foams are used in medical tapes, electronics, gaskets and high-value construction applications, and are sold to converters across North America. The plant’s two extrusion lines have capacity to support several times the current production volume.
For the financial year ended 31 December 2025, Verttec generated revenue of US$5.1m and adjusted EBITDA of US$0.3m, based on unaudited financial information. Revenue has grown at a compound annual rate of approximately 9% since 2023, with the business moving from loss to profit over that period. The Acquisition is expected to contribute positively to Group EBITDA in its first full year of ownership and to be earnings accretive from the second full year.
The Acquisition is expected to make a very modest contribution to Group revenue in the financial year ending 31 December 2026 and, accordingly, the Group’s full-year expectations remain unchanged.
Verttec will continue to operate from its existing facility under the leadership of Ryan Dempsey, who has entered into a new employment agreement and will report to the Group’s North American management. The deferred consideration is contingent on the retention of Verttec’s existing customer revenue and on the delivery of its growth plan and includes a management incentive for Ryan Dempsey. The management incentive is payable after 24 months and conditional on his continued employment and other performance criteria being delivered.
Strategic Rationale
At its Capital Markets Day in March 2025, Zotefoams set out a strategy to expand beyond its core business through organic growth and selective M&A, with medium-term targets of more than £300m in revenue and £60m in operating profit. Following the acquisition of OKC in November 2025, the Acquisition represents the next step in executing that strategy and the first acquisition in the development of the Group’s North American platform.
A capability, not just a product: Crosslinked roll foam is produced through a continuous extrusion and crosslinking process that is distinct from both the nitrogen expansion process used for the Group’s block foams and the non-crosslinked roll foam process at OKC. Developing this capability independently would have required several years, significant capital investment and the execution risk associated with establishing a new process. Acquiring an operating plant with proven products, established customers and spare capacity provides a faster, lower-risk and significantly more cost-effective route.
Completing the range for converters: Many of the Group’s North American converter customers purchase both block and roll foam. The Acquisition allows the Group to offer these customers a complete technical foam solution. Prior to the Acquisition, Zotefoams could supply only one of these two formats in North America. The Group’s North American sales team can now offer both, while Verttec’s customers will gain access to Zotefoams’ application engineering, technical service and testing capabilities.
An attractive, underserved market: The Group estimates that the North American technical roll foam market exceeds US$140m and is growing at 4% to 6% annually, driven by demand from medical adhesive tapes, vehicle lightweighting and sealing applications. Supply is concentrated among a small number of producers, with converters reporting long lead times and high minimum order quantities from incumbent suppliers. Verttec was established to address this market need.
Extending the North American platform: Verttec’s Pennsylvania plant complements the Group’s existing facilities in Walton, Kentucky and Tulsa, Oklahoma. Its spare capacity means growth can be delivered with limited further capital, and the Group will assess further investment in the site, including bringing irradiation in-house, on its own merits.
Commenting on the Acquisition, Ronan Cox, Group CEO of Zotefoams, said: “Verttec adds a valuable capability Zotefoams did not previously have: crosslinked technical roll foam manufactured in the United States, supported by two production lines with significant capacity for growth.
“Many of our North American converter customers purchase both block and roll foam, and prior to the Acquisition we could supply only one of these formats. The Acquisition immediately extends our range with a high-quality product, experienced team and proven manufacturing process, providing a far quicker, more cost-effective and lower-risk route than seeking to build this out ourselves. Verttec marks the first acquisition in the development of our North American platform, and we are pleased to welcome Ryan and the Verttec team to the Group.”
Also commenting on the Acquisition, Ryan Dempsey, President of Verttec, said: “Joining Zotefoams opens an exciting new chapter for Verttec. Together, we have the technology, expertise and reach to win new customers, develop new applications and grow our presence across North America.”
