Canadian paper and pulp products maker Domtar Corp will buy privately held Spanish hygiene products maker Laboratorios Indas, as it tries to expand its personal care business and reduce exposure to weak pulp prices. Domtar will pay a reported €285 ($386) million to private equity firm Portoboello and Santander's Vist Capital to buy Indas. It will also pay off most of Inda's €140 million debt after the deal closes.
The acquisition, expected to close by the end of this year, will immediately add to earnings, Domtar said on Tuesday.
The company has been buying hygiene productt makers in the U.S. and Europe, including Attend and Associate Home Products, for two years as pulp prices remained weak. Revenue from the company's personal care business jumped from $71 million in 2011 to $399 million in 2012, accounting for more than 7% of it business last year.
Indas, which wasa bought by the Spanish private equity firms in 2007 for about €350 million, is Spain's top maker of sanitary napkins and other hygiene products. It exports to several European countries as well as Latin America and Africa.
"With the addition of the new business, Domtar will become one of the leading adult incontinence products manufacturers inEurope," says John Williams, CEO of Domtar.