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Ahlstrom Acquires Orlandi's Spunlace Biz



Published February 1, 2007
Related Searches: Ahlstrom nonwovens Spuntech Personal Care Wipes
Ahlstrom, has signed an agreement to acquire Orlandi's spunlace operation, further broadening its role in the wipes area. The acquisition price is approximately €60 million and the transaction is expected to be EPS enhancing from 2007. Ahlstrom plans to close the deal within the first half of 2007, subject to antitrust clearances and satisfactory conclusion of the ongoing due diligence.
    
Orlandi's spunlace business include plants in Cressa and Gallarate, Italy containing a total of four production lines and 120 employees. Last year, Orlandi's spunlace sales, representing roughly three-quarters of its turnover, were about $75 million. The company had hinted at expansion into North America several years ago but abandoned this plan when several other European spunlace makers, including Norafin and Spuntech, built lines there.
 
The Orlandi acquisition expands Ahlstrom's technology portfolio with airlace technology which is used to manufacture pulp-containing wiping fabrics. In connection with the acquisition, Ahlstrom will invest approximately €2.5 million to increase both the capacity and technical capabilities of the airlace line at the Cressa plant by the end of March. After the investment, the acquired business will generate net sales of approximately €65 million in 2007.
 
Orlandi is currently one of the leading wiping fabrics producers in Europe, serving the personal, household and industrial wipes markets. In addition, the acquired business manufactures medical and industrial spunlace fabrics. Last year, the company said it was reconfiguring one of its lines to produce a three-layer material containing two sheets of spunbonded polypropylene surrounding a layer of fluff pulp that features better characteristics for personal care wipes such as bulkiness, softness and increased resistance.
 
Ahlstrom has a strong presence in the wipes market in North America with two manufacturing units, one in Windsor Locks, CT and another in Green Bay, WI. In December 2006, Ahlstrom started a second spunlace line in Green Bay and, in October 2006, announced plans to expand its wiping fabrics production to South America with a new line in Louveira, Brazil. This new line will be operational in early 2008.
 
"We are building a strong platform to serve our customers globally. The acquisition supports our growth strategy and strengthens our market position in nonwovens," said Jukka Moisio, President and CEO of Ahlstrom.
 
"The wipes segment offers significant growth opportunities and has a high innovation potential globally. Ahlstrom has been consistently building its wipes business through adding technologies and expanding geographically. The acquisition of Orlandi's business further complements our technology base and expands our product offering in the wipes sector," said Claudio Ermondi, Senior Vice President, Nonwovens.
 
The market for spunlace wiping fabrics is estimated to continue to grow at a rate of 7% annually.