Domtar continues to expand personal care division
May 28, 2013 By Pulp & Paper Canada
Domtar has signed a definitive agreement for the acquisition of privately-held Associated Hygienic Products (AHP), the largest manufacturer and supplier of store brand infant diapers in the United States, from DSG International for $272…
Domtar has signed a definitive agreement for the acquisition of privately-held Associated Hygienic Products (AHP), the largest manufacturer and supplier of store brand infant diapers in the United States, from DSG International for $272 million. The closing of the transaction is expected by the end of the second quarter of 2013.
“The market for store brand infant diapers is growing steadily in North America driven by high quality products and a strong value proposition. The acquisition of AHP will provide meaningful market expansion opportunities and innovative product development capabilities with our existing Personal Care business, as well as synergies to the bottom line,” said John D. Williams, president and CEO of Domtar.
This is Domtar’s fourth transaction in the personal care sector in two years. Williams expects the company’s personal care division will reach more than $200 million in annualized EBITDA by 2017.
AHP manufactures and markets infant diapers in the United States with established long-term relationships in the retail distribution channels. AHP operates two large manufacturing facilities, in Ohio and Texas.
According to Domtar, the integration of AHP to Domtar’s Personal Care division is expected to provide annualized synergies of $10 million within two years. The synergies will come from a combination of lower purchasing costs, a reduction in general and administrative costs and sharing of best practices in manufacturing and product development.
Commenting on the benefits of the acquisition, Michael Fagan, senior vice-president, personal care said: “This acquisition will add a key product line to our offering, a competitive manufacturing base to our existing footprint and solid access to the retail channels for our adult incontinence products.”
Domtar Corp. designs, manufactures, markets and distributes a wide variety of fiber-based products including paper-grade, fluff and specialty pulps; communication papers; specialty and packaging papers; and adult incontinence products.
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