German investment group Aurelius is expected to confirm the takeover of the Irish operation of Wellman International this week.

Aurelius, which specialises in acquiring companies "in special situations", is understood to be paying between €35 million and €40 million for the operation, which is based in Mullagh on the Cavan/Meath border.

The 27-acre Wellman plant employs 275 people and is one of the largest employers in the area. It recycles materials to make polyester fibres for the textile industry.

The plant was put on the market earlier this year by its listed US parent group, which said at the time that it was no longer considered as core to its operations. At the time, industry sources estimated that it might fetch up to €35 million.

The German private equity group was most recently in the headlines for the acquisition of the French and Spanish mail order activities of Quelle - part of the retail and mail order group Karstadt Quelle.

The company is headed by two former McKinsey executives, Dirk Markus and Gert Purkert. While its focus to date has been in its home market, the Quelle deal was seen as signalling its intention to examine options further afield.

Aurerlius's official website says its investment focus is on corporate spin-offs and medium-sized independent companies with sales of between €10 million and €500 million. It does not have an industry-specific focus and says it has a long-term investment horizon.

The Wellman factory was established in 1973 and the company has received grants of €4.9 million since then.

Wellman's US parent has reported growing losses in the past couple of years - $98 million in 2006. While the most recent figures available for the Irish operation indicate that it has been profitable as recently as 2005, rising raw material costs are understood to have created more difficult trading conditions since then. The parent company has also put its European PET resins business in the Netherlands on the market.

Neither side was contactable last night for comment.