Indorama Ventures Confirms 66% Stake Acquisition in Fabric Company Avgol

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

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.