Domtar Corp., the Canadian paper maker that’s expanding into personal-care products, agreed to pay $272 million for DSG International Ltd.’s Associated Hygienic Products, a manufacturer of infant diapers.
The deal will close by the end of the second quarter, Montreal-based Domtar said in a statement today. Domtar said it expects to save $10 million within two years by integrating the business with its personal-care segment, which already produces Attends brand adult incontinence products.
Associated Hygienic Products is the largest U.S. maker of store-brand infant diapers with factories in Ohio and Texas, according to Domtar. The acquisition is the Canadian company’s fourth personal-care deal in two years and will boost the division’s earnings before interest, taxes, depreciation and amortization to an annualized $200 million by 2017, it said.
Personal care accounted for $111 million of Domtar’s revenue in the first quarter while pulp and paper represented $1.12 billion.
Domtar rose 2.2 percent to C$72.23 at the close in Toronto.