Ontex Group NV (Ontex), a leading international developer and producer of personal care products, has announced that it has entered into a binding agreement to sell its Brazilian business activities to Softys for an enterprise value of BRL 671 million (~$121.90 million). Softys is a personal hygiene company with operations across Latin America that also acquired Ontex’s Mexican business activities in 2023. It is a wholly owned subsidiary of Empresas CMPC, which is headquartered in Chile.

“This divestment represents another major milestone towards Ontex’s ambitioned portfolio, focusing on retail brands and healthcare in Europe and North America. Moreover, the proceeds from the sale will further reduce our indebtedness, putting us in an even stronger position to execute our transformation. I am convinced that Softys, with its 40 years of experience in the personal hygiene market in Latin America, is well placed to take the business forward, benefiting from the talent and expertise of our teams, as they also did with our Mexican business,” Gustavo Calvo Paz, Ontex’s CEO, said.

The transaction includes Ontex’s business in Brazil and its manufacturing facility in Senador Canedo in the State of Goiás. The business develops, manufactures, commercialises and distributes diapers and pants for the baby care market under the PomPom, Cremer, Sapeka and Turma da Mônica brands, as well as for the adult care market under the Bigfral brand. It has approximately 1,400 employees and contributed revenue of €97 million (~$107 million) and adjusted EBITDA of €13 million (~$14 million) to the group in the first half of 2024, the company said in a press release.

Subject to customary balance sheet adjustments, the net proceeds of the transaction, after deduction of tax-related payments and transaction fees, are expected to be approximately €82 million (~$91 million), of which up to €18 million (~$19 million) will be held in escrow. The transaction will generate a net gain on disposal of approximately €39 million (~$43 million) and trigger the recognition of a non-cash accounting loss of approximately €140 million (~$155 million) related to the accumulated currency translation reserves.

Ontex and Softys aim to close the transaction, which is subject to customary conditions, including merger clearance from the Brazilian antitrust authority, during the first half of 2025.