Essity Enters Agreement to Acquire Remaining 63 Percent of Shares in Asaleo Care

Further to the announcement on December 10, 2020, hygiene and health company Essity has now entered an agreement with hygiene company Asaleo Care to acquire the remaining 63.8 percent of the shares in the company for AUD 1.40 cash per share. Asaleo Care is listed on the Australian Securities Exchange and Essity is the largest shareholder, currently holding 36.2 percent of the shares.

The consideration implies an equity value on a 100 percent basis of approximately AUD 760m (approximately SEK 4.9bn) and an enterprise value of AUD 855m (approximately SEK 5.5bn). This represents an EV/EBITDA multiple of 9.6x based on Asaleo Care's reported underlying EBITDA for 2020 of AUD 89m (approximately SEK 574m).

“Following productive discussions with the Asaleo Board of Independent Directors, I am pleased to announce this agreement. The acquisition of Asaleo Care will facilitate the opportunity for profitable growth in Australia, New Zealand and the Pacific region and will further consolidate our position as a leading global health and hygiene company”, says Magnus Groth, president and CEO, Essity.

Asaleo Care manufactures and markets Personal Care and Professional Hygiene products in Australia, New Zealand and Fiji and Consumer Tissue in New Zealand and Fiji. The company’s portfolio of market-leading brands includes Libra, Handee Ultra, Purex, Sorbent, Deeko, Viti and Orchid, and the global brands TENA and Tork through an exclusive license agreement with Essity.

In 2020, Asaleo Care reported sales of AUD 419m (approximately SEK 2.7bn) and underlying EBITDA of AUD 89m (approximately SEK 574m). Sales growth in 2020 amounted to 2.3 percent. Asaleo Care has approximately 700 employees and three manufacturing facilities.

The proposal is not subject to financing conditions. Essity will finance the acquisition of shares through own funds.

The agreement is supported by the Independent Directors of Asaleo Care and is expected to be voted on at a meeting of the independent shareholders in Asaleo Care in the second quarter of 2021. Subject to the approval of the agreement at that meeting, subsequent court and regulatory approvals, the completion of the transaction is expected to be finalized in the second quarter of 2021.

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