The Great Nonwovens Sell-Off

By Karen Bitz McIntyre, Editor | December 8, 2005

Who Will Be Next?

A few weeks ago, one of the world’s top nonwovens producers announced what had been rumored in the industry for months, possibly years. The nonwovens business of The BBA Group, worth an estimated £700 million, is for sale. With its core business in aviation services, London-based BBA Group said the sale of its Fiberweb division, which achieved nonwovens-related sales above $1 billion last year, would allow it to better position its aviation services business, which provides cargo and ground handling for 95 airports worldwide.    

With plants located literally throughout the world, BBA built its nonwovens business through a steady stream of acquisitions and capital investments and has long billed itself as a one-stop shop for all types of nonwovens. Even while on the selling block, the company continues to expand. Not long after being officially put up for sale, the company issued a release announcing the addition of a $25 million Reifenhauser line in Norrkoping, Sweden. And, in making this announcement, Fiberweb indicated additional investments, throughout the world, would be forthcoming.

So why would a company look to divest a business that is clearly still in growth mode? Maybe it’s because nonwovens continue to increase in notoriety on the world market, making them continuously more attractive to investors. Is BBA striking while the iron is hot, so to speak, offering its nonwovens business for sale in a market where nonwovens is still considered a viable business?

After all, BBA is following a string of fairly large-scale nonwovens-producing companies that have changed ownership in recent months. Even since the BBA announcement, another important nonwovens producer, Georgia-Pacific, whose airlaid business achieved sales of  nearly $150 million last year, was purchased by Koch Industries. And, a few months ago, another top nonwovens producer Polyfelt was sold to Royal Ten Cate for a reported €70 million.

In the business world, they say that everything has a price. If that’s true, does this mean that any one of the world’s top nonwovens producer, from Freudenberg on down, could be the next takeover target? And, if so, what will these changes in ownership mean for the industry?

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