Indorama Ventures Confirms 66% Stake Acquisition in Fabric Company Avgol

Calcalist first reported the negotiations last week

Lilach Baumer 12:3313.05.18
Bangkok-headquartered Indorama Ventures Public Company Ltd. Has entered into a definitive agreement to acquire a 65.72% stake in Tel Aviv-listed hygienic fabric company Avgol Industries 1953 Ltd., the firm announced Sunday. Subject to regulatory approval, the deal is expected to be completed during the second half of 2018.


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Indorama will buy the stake from Bank Leumi and HFH International B.V., a Dutch company controlled by London-based private equity firm Ethemba Capital Ltd. Indorama stated the acquisition will be made at a sum of $1.62 per share, giving Avgol a company valuation of around $480 million.


Avgol factory. Photo: PR Avgol factory. Photo: PR



Calcalist first reported the negotiations last week, citing one person familiar with the matter who spoke on condition of anonymity.


Bangkok Stock Exchange-listed Indorama is a chemical producer and a manufacturer of wool yarns. Founded in 1994 by Indian businessman Aloke Lohia and employing over 15,000 people, Indorama reported revenues of $8.43 billion and EBITDA of around $1 billion for 2017.


Israel-headquartered Avgol manufactures nonwoven fabrics for diapers and feminine hygiene products. The company employs around 900 people across 18 global manufacturing plants, including in North Carolina, Russia, and China, with a combined production capacity of 203,000 tonnes a year. In July 2017, the company sold one of its Israeli factories for $15 million, following a decision to relocate the company's manufacturing to southern Israeli town Dimona, at the cost of $60 million.


According to Indorama, the hygiene industry is the largest consumer of disposal nonwoven fabric, and Avgol controls 10% of the market. Indorama stated the acquisition is intended to strengthen its leadership position in the personal hygiene-oriented nonwovens market, which it considers a high growth segment.


“Avgol has already made some significant investments to grow the business by expanding its production capacity and geographical footprint,” said Indorama founder and CEO Aloke Lohia in a statement. He added that Indorama will build on Avgol’s established client base, capabilities and substantial presence in high-growth markets.

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