Online Exclusives

Ontex To Launch IPO

By Karen McIntyre, senior editor | May 29, 2014

Private labeler reports impressive growth record.

Private label diaper manufacturer Ontex announced its intent to launch an initial public offering on Euronext Brussels. Based in Aalst-Erembodegem, Belgium, Ontex is a leading maker of branded and retailer brand hygienic disposable products in Europe, the Middle East and Africa.

The company sells its products to retailers, helping them to establish or enhance their own brands. In 2013, Western Europe represented 68% of sales, but Ontex also has a growing presence in emerging markets where it offers both private label products and its own brands. In late 2013, the company opened a plant in Istanbul, Turkey, citing the country as a stong growth area.

“Our investment in Istanbul is an indicator of our strong confidence in Turkey,” says ONTEX CEO Charles Bouaziz. “Ontex believes in Turkey’s potential and future, and as such it is now on the list of the few countries where we have manufacturing operations.”

Currently, about 18% of Ontex’s sales are conducted in the Mid East and rest of the world, while 13% of sales are done in Eastern Europe. Both of these areas exhibit strong growth potential and can be well served from Turkey.

Company-wide, revenues have grown 4.7% annually from 2003 to 2013, reaching about €1.5 billion in 2013, and this level of growth is believed to be sustainable. In terms of markets served, 53% of Ontex's sales were babycare products in 2013 while 33% were adult incontinence items and 13% were feminine hygiene.

Ontex was founded in 1979 by the Van Malderen family and operated as a family business until 1998 when it was listed on Euronext Brussels. The company was delisted in 2003 when it was purchased by a group of funds led by Candover. In 2010, Ontex was acquired by funds managed by affiliates of Goldman Sachs.

"We are pleased to announce our intention to list Ontex in Brussels," Bouaziz says. "The company has delivered strong growth and cash flow generation as a private company, which has enabled Ontex to make substantial investments in its business to support the delivery of its long-term growth vision."

In 2011, Ontex acquired Lille Healthcare, an adult incontinence company based in France and in 2013, Ontex acquired Serenity, an Italian manufacturer of incontinence products.

“We will become a newly listed Belgian company with the enhanced capital markets profile to support our growth strategy in line with our scale and status as a leading manufacturer of branded and retailer branded hygienic disposable products across Europe, the Middle East and Africa,” Bouazziz continues.

In addition to Bouaziz, who has 25 years of industry experience including senior roles at PepsiCo, Procter & Gamble and Monoprix, Ontex is led by an experienced team with substantial expertise in consumer packaged goods and complex manufacturing environments. The board of directors is chaired by Paul Walsh, former CEO of Diageo and contains three independent, non-executive directors with deep experience in FMCG, as well as three members of management and representatives of Ontex’s shareholders, who will be announced in the near term.

The offering will comprise the sale of newly issued and existing ordinary shares to institutional and retail investors in Belgium and to certain institutional investors internationally. It is expected to consist of a €325 million primary issuance and a secondary sell down by the current shareholders of existing shares. Ontex will use the net proceeds of the offering to reduce its leverage by redeeming €280 million of its existing debt.