First Quality Retail Services, LLC, has completed the acquisition of Covidien Ltd’s retail products business including its sizable private label diaper business as well as adult inconitnence and feminine hygiene products. First Quality announced in December it would buy this business, North America’s largest supplier of private label disposable baby diapers, for about $335 million. Covidien’s Covidien’s Retail Products business, headquartered in King of Prussia, PA, reported sales of $744 million in fiscal 2007.
Also a producer of spunmelt nonwovens, First Quality’s acquisition of Covidien is being closely watched by other spunmelt producers supplying North America, especially those that currently selling goods to Covidien. The acquisition will likely result in a supply shift throughout the spunmelt market as First Quality competitors assume some of its diaper market business and First Quality uses more and more of its output to fuel its diaper and related businesses. First Quality’s latest spunmelt line—a multibeam Reicofil machine—is currently under construction at its Hazleton, PA facility. The group has not revealed how much of the Covidien business can be fueled by its current nonwovens output or if it has any additional plans for nonwovens investment.