FLSmidth has signed a definitive agreement to divest its cement business to an affiliate of Pacific Avenue Capital Partners, in a deal valued at an initial €75 million ($133 million).
The deal comes with the potential for an additional deferred consideration of up to €75 million.
The divestment marks the culmination of FLSmidth’s transformation into a pure-play supplier of technology and services to the global mining industry, following its 2023 announcement to pursue distinct strategies for its mining and cement divisions.
“I am incredibly proud of what our cement business has achieved in its more-than-140-year-long history with FLSmidth,” FLSmidth chair of the board of directors Mads Nipper said.
“We firmly believe that this divestment represents a pivotal step in unlocking the full potential for both our mining and cement businesses.”
Nipper said that the cement unit is now better positioned to pursue its strategic goals independently.
FLSmidth chief executive officer Mikko Keto highlighted the strategic benefits, as the divestment allows the company to focus on its core mining business.
“With a clear and focused mining strategy, we are confident that we are well positioned to drive long-term value for our customers, shareholders and other stakeholders,” Keto said.
Pacific Avenue Capital Partners, known for its expertise in carve-outs, will acquire the entire cement division, including its brands, assets, intellectual property (IP), and employees. Some legacy contracts and the Air Pollution Control asset will remain with FLSmidth.
“We are excited to acquire FLSmidth Cement, a global leader providing mission critical equipment and aftermarket solutions in the cement sector,” Pacific Avenue Partners Jason Leach said.
“We believe that cement will continue to play a crucial role in global economic development and that FLSmidth Cement’s product innovation will play an important role in the decarbonisation of the industry.”
The transaction is expected to close in the second half of 2025, pending regulatory approvals.