Acquisitions, investments and divestments
Acquisition of distribution rights to Sorbact in Australia and New Zealand
On April 6, 2021, Essity announced that it had acquired the distribution rights to the wound care technology Sorbact® in Australia and New Zealand from the Australian company Bayport Brands. In 2020, sales of Sorbact® in the region amounted to AUD 1.7m (approximately SEK 11m).
Acquisition of Asaleo Care
On July 1, 2021, Essity announced that it had finalized the acquisition of the remaining 63.8% of the shares in Asaleo Care, listed on the Australian Securities Exchange, for AUD 1.40 cash per share. The consideration implies an equity value on a 100% basis of approximately AUD 760m (approximately SEK 4.9bn) and an enterprise value of AUD 855m (approximately SEK 5.5bn). Essity AustralAsia, which is the name of the regional unit, was consolidated into Essity’s accounts as of July 1, 2021. In 2020, Asaleo Care reported sales of AUD 419m (approximately SEK 2.7bn) and underlying EBITDA of AUD 89m (approximately SEK 574m). Asaleo Care had approximately 700 employees and three manufacturing facilities.
Acquisition of ABIGO Medical AB
On July 2, 2021, Essity announced that it had finalized the acquisition of the remaining 25% of the shares in ABIGO Medical AB and the company is now a wholly owned subsidiary of Essity in the Medical Solutions product category. Essity acquired 75% of ABIGO Medical in February 2020. The shares were acquired from founder and chairman of the board Jan G. Smith at a valuation of SEK 900m for 100% of the company on a debt-free basis.
Acquisition of Productos Familia S.A.
On August 31, 2021, Essity finalized the acquisition of 45.8% of the shares in the Colombian hygiene company Productos Familia S.A. (“Familia”). The purchase price amounted to SEK 5,961m on a debt-free basis. Essity now owns 95.8% of Familia. Familia is headquartered in Medellín, Colombia, and has a strong presence in Latin America. The company primarily operates in Personal Care in addition to Consumer Tissue and Professional Hygiene. Familia is already consolidated in Essity’s accounts, and reported sales in 2020 of SEK 6,950m, an adjusted EBITDA of SEK 1,419m and adjusted EBITA of SEK 1,170m, equivalent to an adjusted EBITA margin of 16.8%.
Acquisition of sports tape brands
On November 1, 2021, Essity announced that it had acquired the professional sports tape brands Coach, Elastikon and Zonas, which are established premium products in the USA market. The purchase price is not material and is not disclosed.
Acquisition of AquaCast Liner
On December 21, 2021, Essity announced that it had acquired AquaCast Liner, a specialist orthopedics company that supplies waterproof cast liners in the USA market. The purchase price is not material and is not disclosed.
Acquisition of Hydrofera
On December 29, 2021, Essity announced that the company had acquired Hydrofera, which offers technology and products in advanced wound care in the USA and Canadian markets. The purchase price amounted to USD 116m (approximately SEK 1.1bn) with a potential additional earnout amount of USD 15m (approximately SEK 140m) on a cash and debt-free basis. During the first nine months of 2021, Hydrofera had net sales of USD 20.7m (SEK 176m) with EBITDA of USD 5.9m (SEK 50m), EBITA of USD 5.6m (SEK 48m), corresponding to an EBITA margin of 27.2%. Sales growth for the first nine months of 2021 amounted to 22%. In 2020, the company reported net sales of approximately USD 23.5m (SEK 216m) with EBITDA of USD 4.6m (SEK 42m) and EBITA of USD 4.3m (SEK 39m), corresponding to an EBITA margin of 18.1%. Sales growth in 2020 amounted to 13%. The acquisition is expected to contribute to Essity’s earnings per share in 2022.
Investments to reduce climate impact
On July 6, 2021, Essity announced that the company is investing approximately EUR 11m (approximately SEK 110m) in its Hondouville tissue production facility in France. The investment will enable the extraction of 98% of the paper fibers contained in food and beverage cartons and enable Essity to recycling approximately 24,000 tons of packaging annually. The improved recycling system will be fully operational during the first half of 2022.
On October 6, 2021, Essity announced that the company is investing in enhanced efficiency at the company’s site in Kawerau, New Zealand, which will include the world’s first tissue machine running a fully geothermal steam drying process. Together with a reduction in pulp consumption, reduced waste and elimination of the burning of natural gas on the machine, the improvements will contribute to a reduction of carbon emissions by 23% from the Kawerau site. The investment of approximately AUD 15m (approximately SEK 95m) is partly funded through the Government Investment in Decarbonizing Industry (GIDI) Fund, administered by EECA (Energy Efficiency and Conservation Authority) in New Zealand.
On October 27, 2021, Essity announced that it is launching a pilot project to run a paper machine CO2-free with hydrogen from renewable energy at the company’s production facility in Mainz-Kostheim, Germany. Essity’s investment in the project amounts to EUR 4m (approximately SEK 40m).