June 2013
Over The Wire Tissue Edition
Archive/Subscribe | TAPPI.org | Advertise | TAPPI Press Catalog
 

Domtar to Acquire Associated Hygienic Products

Print Print this article | Send to Colleague

Domtar Corp., Montreal, Que., Canada, will acquire privately-held Associated Hygienic Products (AHP), the largest manufacturer and supplier of store brand infant diapers in the U.S., from DSG International for $272 million. The closing of the transaction is expected by the end of the second quarter, subject to customary closing conditions.

"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 will be our fourth transaction in Personal Care in two years, and with it the division will reach more than $200 million in annualized EBITDA by 2017. This earnings runway is part of our company-wide goal of having $300-$500 million in annualized EBITDA from growing businesses over the next four years."

AHP manufactures and markets infant diapers in the U.S., with established long-term relationships in the retail distribution channels. It operates two large modern facilities, a 376,000 sq. ft. manufacturing facility in Delaware, Ohio, and a 312,000 sq. ft. manufacturing facility in Waco, Texas. The company also has administrative offices and operates a distribution center in Duluth, Ga. AHP has 621 employees and an annual run rate sales and EBITDA of $320 million and $31 million respectively.

It is anticipated that the integration to Domtar's Personal Care division will 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, SVP, Personal Care, said that "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. AHP invests heavily in research and development and brings to the marketplace quality products, a highly trained workforce, and the know-how to service large retailers. I am also impressed with the substantial investments made in the past five years in the facilities, which will limit the capital requirements for the foreseeable future."

 

 

Share Share on Facebook Share on Twitter Share on LinkedIn

Buckman
Xerium Technologies, Inc.
Naylor, LLC

TAPPI Over the Wire - Tissue Edition | 15 Technology Pkwy. S. | Norcross, GA 30092 USA | Voice: 770.446.1400 | Fax: 770.446.6947