Indorama Ventures Public Company Limited (IVL), a global chemical producer, has entered into a definitive agreement to acquire a 65.72% stake in Avgol Industries, an Israel-based manufacturer of spunmelt nonwovens for $1.62 per share. Avgol has six production sites globally in Israel, the U.S., Russia, China and India, with a combined production capacity of 203,000 tons per year and 900 employees worldwide. Its sales were reported at $339 million in 2016.
The transaction is expected to be completed during the second half of 2018, subject to regulatory approvals.
Avgol is among the largest manufacturer of nonwovens for hygiene applications in the world, and holds a global market share of 10%. Avgol’s high-performance nonwoven fabrics are used by leading manufacturers of baby diapers, feminine hygiene products and adult incontinence products. Avgol also offers advanced solutions leveraging its proprietary technology such as Avspun and Avsoft hydroentangled spun laid fabrics, which address consumer requirements, including that of thinner, more discrete, softness and higher performance products.
This acquisition represents an opportunity for Indorama to strengthen its leadership position in the high-growth personal hygiene oriented nonwovens market. Avgol offers IVL further diversification of its high value-added (HVA) portfolio. The acquisition will allow both companies to provide customers with a comprehensive range of products. Indorama Ventures will also be well-positioned to generate future growth in adjacent segments through its strong innovation pipeline, enabling the company to continue to provide compelling value and service to its customers worldwide.
“We are excited by the unique opportunity to bring Avgol into the Indorama Ventures family as it is a major step into expanding our HVA portfolio,” says group CEO Aloke Lohia. “With this acquisition, we are adding a company that has a distinctive position within a compelling segment and with strong growth prospects. Avgol has already made some significant investments to grow the business by expanding its production capacity and geographical footprint and we hope to capture the benefits and help the company reach further heights. Avgol’s established client base, complementary capabilities and substantial presence in high-growth markets, together with Indorama Ventures’ global presence, will provide a strong opportunity for creating additional value to best serve all our customers.”