According to a report published in the Bloomberg financial news service, Belgium-based Ontex Group NV is considering a bid for Domtar Corp.’s personal care business. The deal could value the unit, which has operations in the U.S. and Europe, at as much as $1.1 billion, according to people with knowledge of the matter.
Domtar announced the personal care unit was under review during its latest earnings call August.
“Over the past year, we have significantly improved the operating structure and cost profile of our Personal Care division due in large part to the hard work and perseverance of our teams. In addition, the scale-up of new customer and sales pipeline gives us confidence in the long-term prospects for the business,” CEO John Williams said. “With this positive momentum, we believe now is the right time to initiate a strategic review.”
Domtar’s personal care unit, which is generating about $110 million in annual earnings before interest, taxes, depreciation, and amortization, is also attracting private equity interest, according to the report. The unit has grown sharply in recent years thanks largely to a slate of acquisitons which include Attends adult incontinence businesses in North America and Europe, Associate Home Products, a U.S. private label diaper maker, Labatorio Indas, a Spanish hygiene specialist and Butterfly BodyLiners a start-up in the bowel leakage space.
In addition to its hygiene products output, Domtar also operates an airlaid nonwovens business, called EAM, which was purchased from Rayonier in 2012. This Jesup, GA-based business was combined with Domtar’s pulp business earlier this year, and it is not clear if it would be sold along with the personal care unit.
A long-time leader in the European hygiene market, Ontex significantly expanded its presence in the North American market through the acquisitions of Brazil’s Hypermarcas in 2017 and Grupo Mabe, a Mexican hygiene maker, in 2016. Earlier this year, the company entered the U.S. market with the purchase of Albaad’s feminine hygiene facility in North Carolina.