TPG, Goldman Buying Ontex from Candover for $1.5 Billion

LONDON(Reuters) – U.S. buyout firm TPG and the private equity arm of Goldman Sachs (GS.N) on Thursday agreed to buy diaper-maker Ontex from rival Candover (CDI.L) in the year’s largest European buyout.

 

The deal, which Candover said values Ontex at 1.2 billion euros ($1.53 billion) including debt, is Europe’s largest buyout this year, just ahead in dollar terms of KKR’s 955 million pound ($1.47 billion) deal for Pets at Home.

 

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 diapers and 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 87 million euros 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.

 

($1=.7869 Euro)

 

($1=.6517 Pound)

 

By Simon Meads
(Additional reporting by Victoria Howley; Editing by David Cowell)