Canadian paper and pulp products maker Domtar Corp will buy privately held Spanish diaper maker Laboratorios Indas, as part of its efforts to build its hygiene business and lessen its dependence on unfavorable pulp pricing.
Domtar will pay €285 million to private equity firm Portobello and Santander's Vista Capital to buy Indas. It will also repay most of Indas' €140 million debt after the deal closes.
The acquisition, expected to close by the end of this year, is expected to immediately add to earnings, according to Domtar. The company has been buying diaper makers in the U.S. and Europe for two years as pulp prices remain 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 was 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 in Europe," says John Williams, Domtar CEO.