Domtar Reportedly Bidding for Diaper Maker Indas

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Spanish buyout firms Portobello and Santander's Vista Capital are selling diaper maker Indas, and have attracted a bid from Canadian paper group Domtar Corp. among others, banking and private equity sources said in a Reuters news service report this week. Indas, which was bought by the two Spanish private equity firms in 2007 for about EUR 350 million, is Spain's top maker of incontinence pads and other hygiene products and exports to several European countries as well as Latin America and Africa.

Domtar has been buying diaper makers in the U.S. and Europe in the past two years to expand its personal care business and lower its exposure to weak pulp prices.

Other firms such as U.S. private equity firm Blackstone had also looked at Laboratorios Indas, which could fetch between EUR 300 million and EUR 400 million (about $540 million), but Blackstone was unlikely to stay in the running, two sources said, according to Reuters.

Portobello Capital, Vista and Blackstone declined to comment, while Domtar said it would not comment on speculation. Five people familiar with the matter confirmed that Indas was up for sale.

Ageing populations across the world have pushed up demand for incontinence products—sales of adult diapers are set to overtake baby ones by next year in Japan, according to research firm Euromonitor. Spain is one of the European Union countries where the median age has risen the most over the past decade, but deep spending cuts in the recession-hit country have also hurt businesses in recent years.

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