PGI’s impending sale had been the subject of rumors in the industry for years and a few months ago the company even admitted it was exploring different means of improving value to its shareholders, including a possible sale. Blackstone has maintained a relationship with PGI for some time, most recently as an adviser during its strategic review process.
PGI’s progress has been impressive since it was rescued from bankruptcy by Matlin Paterson. The company has not only increased its sales and earnings, it has followed an ambitious investment strategy that has propelled it to the top of many regional markets. In Latin America, PGI has state-of-the-art spunmelt lines in Argentina, Brazil and Mexico, where it is considered a top player in this growing hygiene market. Meanwhile, PGI successfully predicted the movement of the medical garment converting business to Asia and was ready to serve this market with high tech operations in China where it is now considered a leader.
In more established regions, PGI has also been successful with one new line in North Carolina and another being installed in Waynesboro, VA. In Europe, PGI’s purchase last year of Telsaca gave it instant access to this large market, which had been the one world region where PGI’s presence was not that strong.
While spunmelt has clearly been a focus, PGI has looked beyond hygiene and continued to be strong in a number of industrial and wipes markets.
According to Blackstone sources, this impressive manufacturing footprint, particularly in emerging markets, is largely what drew the investment group to PGI. However, as the deal evolves it will be interesting to see if these investment bankers take the same ambitious strategy when it comes to moving forward as PGI has during the past decade. Will a group of bankers see investment in a $50 million line more as risk or as reward? And, what will this same group of bankers do with PGI’s impressive arsenal of modern lines? Will they compete on prices—like so many other companies in the nonwovens industry are already doing—or will they focus on innovation and new product development for success?