Domtar Inc. is aiming to become one of Europe's leading manufacturers of adult diapers with the acquisition of a high-profile Spanish brand-name company.
Montreal-based Domtar said on Tuesday it has struck a deal to acquire privately held Laboratorios Indas for €285-million (about $402-million Canadian).
Domtar will also assume about €140-million of debt in the deal.
Recession-resistant adult-incontinence products are a key element in Domtar's strategy to reduce its dependence on the declining office paper business and cyclical pulp-and-paper market.
At the same time, Domtar can supply the personal care division with its own pulp.
It first entered the consumer products market in 2011 with the purchase of Greenville, N.C.-based Attends Healthcare Inc., manufacturer of incontinence undergarments and other products.
In 2012, Domtar added European diaper maker Attends Healthcare Ltd. to its portfolio, giving it ownership of the Attends brand on both sides of the Atlantic.
Earlier this year, the company bought the largest maker of store-brand infant diapers in the United States, Associated Hygienic Products.
The Indas transaction will allow Domtar to build a pan-European diaper business, Domtar president and chief executive officer John Williams said.
"The acquisition of Indas advances our transformation into a leader in Personal Care, an attractive market segment that is an important growth engine for Domtar," he said.
"The combination of our strong franchise in Northern Europe with Indas' best-in-class adult incontinence products business in Southern Europe promises to deliver solid results," said Domtar senior vice-president of personal care Michael Fagan.
Closing of the Indas deal is expected by year-end 2013, the company said.