US buyout firm TPG and the private equity arm of Goldman Sachs yesterday agreed to buy nappy-maker Ontex from rival Candover in the year’s largest European buyout.
The deal, which Candover said values Ontex at €1.2bn (£1bn) including debt, is Europe’s largest buyout this year, just ahead in dollar terms of KKR’s £955m deal for Pets at Home.
“Through our global reach and operational capabilities, we look forward to helping drive the next stage of the company’s profitable growth,” said Simon Henderson, head of TPG’s UK buyout team.
Private equity firms are competing aggressively for deals. They are increasingly buying companies from each other, in so-called secondary buyouts, as they look to deploy hundreds of billions of dollars of unspent funds.
Ontex is a market leader in private-label hygiene products, including nappies and baby wipes. Its sale marks another exit for Candover, whose reputation has been tarnished by the high-profile blow up of its 2008 fund.
The firm is set to lose some €87m on its investment, after the business ran into serious headwinds, including higher raw material costs and a price war with branded competitors, shortly after Candover bought it in 2003.