Divestment of Hygiene Wipes Business for Euro 65 million (£44.2 million)
30 March 2007
Fiberweb plc announces it has agreed the sale of its hygiene wipes business to Ahlstrom, the Finnish global manufacturer of speciality papers and nonwoven products, for a total consideration of Euro 65 million (£44.2 million) subject to regulatory approvals. This is payable in cash and subject to working capital adjustments. The disposal is expected to be earnings neutral in 2007 before non-recurring charges, with proceeds from the disposal being used to pay down debt.
The hygiene wipes business manufactures wipes for baby care, personal care and household applications and has sales of around £83 million per annum. The business has manufacturing operations in the US, Spain and Italy and gross assets of £68 million. In 2006 it made a loss of £0.2 million before shared costs, interest and tax. The disposal will result in a non-recurring loss of approximately £20 million including £6 million of cash costs which relate to the implementation of the transaction and associated restructuring. As Fiberweb aligns its operations to reflect the disposal of a significant part of its hygiene business, it is expected that further restructuring charges in the order of £4 million will be incurred in 2007. It is expected that the transaction will complete by June 2007 subject to regulatory approvals.
Commenting on the disposal, Fiberweb's CEO Daniel Dayan said today:
"At the time of our demerger in November 2006, we highlighted that conditions in the wipes market had been challenging in recent years and that a strategic review of this business was being undertaken. Having looked at all of the options available, we have concluded that a sale is the best course of action to pursue, allowing management to focus its efforts on the wider turnaround strategy outlined at the time of our demerger as well as reducing net debt. Ahlstrom is a leader in Wipes and well positioned to make this a successful and growing business.
"This divestment represents a significant milestone in the continued transformation of the wider business. It will allow the management team to focus on growing our differentiated industrial business and make selective investments in attractive areas of the hygiene market where we can continue to build leading positions."