Sales: $350 million
Description: Key Personnel
George Glatfelter, CEO; Dante Parrini, executive vice president and COO; Jonathan Bourget, vice president and general manager Advanced Airlaid Materials; Lionel Bitton, general sales manager, Advanced Airlaid Materials
Canada, Germany, France, U.K.
This year, the airlaid producer formerly known as Concert Industries is under new ownership. In February 2010, specialty paper manufacturer Glatfelter bought the Gatineau, Quebec-based company for a reported $235 million, representing the largest acquisition in the company’s history. The airlaid business now functions as a third business unit within Glatfelter—Advanced Airlaid Materials—which comprises about 15% of total sales.
“If you look at Glatfelter’s business model, we focus on being a product leader in niche areas,” explained Dante Parrini, executive vice president and COO of Glatfelter. “Concert was a world leader in the feminine hygiene market, and we were very impressed with what Concert had achieved on its own and felt the size and scope of Glatfelter could enhance this. We are here to stay and we have the capital to help the business grow in the future.”
In January, Mr. Parrini will succeed George Glatfelter as the company’s next CEO.
Glatfelter has spent the last decade working to build its business by expanding into new areas largely through acquisitions rather than Greenfield investments, which present the challenge of introducing incremental capacity into the market. Through acquisition, Glatfelter has not only bought existing capacity but also gained intellectual property and know-how.
“This is our fifth acquisition since 1998 and it is consistent with our strategy to build on areas where we are already a leader,” Mr. Parrini said. “We had been looking to expand more into engineered fiber-based materials and we looked at a lot of options. We already knew the nonwovens industry because of our wetlaid operations in Europe, and we view airlaid as a good adjacent technology to our existing businesses.”
Beyond the acquired business, Glatfelter operates a diverse specialty papers business that includes, among other things, a sizeable wetlaid nonwovens business in Germany, France and the U.K. Core applications for this business, which was valued between $100-150 million last year include tabletop applications and surgical masks.
During the past several years, Concert—under the ownership of Brookfield Asset Management—had successfully embarked upon a turnaround program that not only relieved it of the financial burdens that led to a bankruptcy filing in 2004 but also well positioned it for the future. Today, the core business ofthe Falkenhagen, Germany and Gatineau, Canada facilities is in the feminine hygiene market but both sites are also growing in many other areas such as adult incontinence, food pad, tabletop and wipes. Much of the output is already contracted through 2013 and some 80% of current revenue is attached to raw material price pass-throughs, which allows the company to raise and lower prices depending on its supplier base.
In the fourth quarter of 2009, Concert began ramping up a third state-of-the-art European airlaid line, representing a $70 million investment in Falkenhagen, Germany. The new line added 18,000 tons to the company’s global capacity and now brings Glatfelter’s total airlaid output to 84,000 tons.
“We have studied the nonwovens market for decades and we are well aware of airlaid’s past challenges but we are now seeing a better balance between supply and demand,” Mr. Parrini said.
By adding the strength of Concert’s airlaid business to Glatfelter’s existing knowledge in specialty papers and other technologies, the company is hoping to capitalize on synergies across all of its business units, which in addition to advanced airlaid include composite fibers and specialty papers.
“We are identifying programs and projects all the time but even our customers are looking at our synergies and coming up with their own ideas. Already we are having a lot of success in branding the businesses and presenting it as Glatfelter,” said Lionel Bitton, general sales manager for Glatfelter Advanced Airlaid Business unit in the Americas.