“This acquisition is a continuation of our focus of adding industry leading nonwoven products lines to our composite fibers business,” CEO Dante Parrini said in a conference call with analysts following the announcement.
Citing strong growth prospects for nonwovens wallcoverings in Western Europe, Eastern Europe and Asia, Parrini said he expects the market to grow 10% annually in upcoming years, outpacing demand for traditional paper products.
“The thicker nonwoven works better over plaster and its rapidly becoming the product of choice for many installers,” he added.
Specifically, the advantages of nonwoven wallpaper include dry strip-ability, higher tear resistance and no material shrinkage or expansion when wet. In 2012, Dresden’s sales were €117 million ($151 million), and EBITDA was €30 million ($38 million). Glatfelter will purchase the company for €160 million ($209 million), financed through cash on hand and other existing financing.
Parrini would not comment if Glatfelter has its eye on any other acquisition opportunities.
Dresden Papier will become a part of Glatfelter’s composite fibers business which has been earmarked as a strong growth area for the company as it shifts it lessens its reliance specialty papers. Since 2006, composite fibers—along with the company’s advanced airlaid business which was acquired from Concert Industries in 2010—have grown to represent 54% of the group’s sales compared to 30%. Specialty papers meanwhile, which once comprised 70% of sales, now account for 46% of Glatfelter’s business. This shift comes as a result of the company’s strategy of exposing itself to growth businesses, according to Parrini.