Avgol, an Israeli-based manufacturer of nonwovens, has acquired Cleaver Associates, the distributor of the majority of its products in North America and other territories worldwide, for a reported $7 million.
Cleaver is Avgol’s exclusive distributor in North America and a nonexclusive distributor in other territories. Approximately 80% of Avgol’s sales in 2010 were carried out through Cleaver.
Within the scope of the agreement, Avgol shall acquire Cleaver’s assets, including the rights to the trade name Cleaver Associates as well as the know-how, goodwill and the tangible assets developed by Cleaver and shall integrate the sales and distribution operations that are being carried out through the company with Avgol’s operations. Avgol intends to finance the acquisition from its own current sources. Cleaver shall continue to market Avgol’s products as usual, without change, until the end of 2012.
“The acquisition of Cleaver is part of Avgol’s strategy of merging its external sales and distribution systems into the company’s operations in order to proceed with our expansion plans in Avgol’s international markets,” said Shlomo Liran, Avgol’s CEO. “Recently, Avgol announced the implementation of investments that are expected to expand our production capacity to about 140,000 tons, at an investment of about $80 million. The production capacity will be expanded during 2011-2012 at Avgol’s plant in the U.S. and on another continent. The acquisition of Cleaver is the natural progression of this strategy.”
During the third quarter of 2010, Avgol reported revenue of approximately $75.2 million, representing growth of about 44% compared with the corresponding period last year. During the first nine months of 2010, Avgol’s revenue totalled approximately $205 million, compared with about $153 million during the same period last year. Net profit during the third quarter totalled about $8.4 million compared with $2.6 million during the corresponding period last year. During the first nine months of 2010, Avgol’s net profit reached about $15.1 million.