Polymer Group Inc. wants to expand in the fast-growing nonwovens market through a hostile takeover bid for Dominion Textile Inc. of Montreal.
The North Charleston, S.C., firm is interested in Domtex's spun-bonded polyolefins business that supplies plastic liners to makers of disposable diapers and hygiene products, said James Bryant, Polymer Group's director of investor relations.
Domtex's spun-bonded businesses are Poly-Bond of Waynesboro, Va., and Nordlys SA in Bailleul, France. Spun bonding involves extruding fibers and fusing them into a fabric using heat.
Polymer Group competes against the Domtex subsidiaries with its own spun-bonded operations in Mooresville, N.C., and San Luis Potosi, Mexico. It also makes a wide array of other nonwoven plastic products for hygiene, medical and industrial applications, Bryant said.
Polymer Group and its affiliate InterTech Group already have acquired 14.5 percent of Domtex's shares. The North Charleston company has set up a Canadian subsidiary, DT Acquisition Inc., which is bidding for the rest of Domtex at C$11.75 (US$8.46) per common share and C$109.50 (US$78.84) per first preferred share, for a total of about C$413 million (US$297 million).
Domtex director of investor relations Colleen Smith said her firm is considering a range of strategies to boost shareholder value, including selling Poly-Bond or other divisions, mergers, joint ventures and strategic alliances.
A Domtex committee is reviewing options and will recommend a strategy ``as fast as possible,'' Smith said in a telephone interview. Polymer Group's offer expires Nov. 20.
Domtex is spending US$34.5 million to expand spun-bonding capacity at Waynesboro by 40 percent by the year-end. It also has a joint venture near Buenos Aires, Argentina, that is near commercial production.
Domtex's nonwoven operations represent about 20 percent of the firm's annual sales of C$1.1 billion (US$792 million) but are far more profitable than its fabrics businesses, such as Swift Denim. Polymer Group would sell Domtex's fabrics businesses.
Polymer Group's 14 manufacturing plants in North America and Europe generated sales of US$521 million last year. The facilities mainly process polyolefins, PET and rayon, according to Bryant. He claims his company is fourth-largest globally in nonwovens but offers the most diverse technologies.
Larger players include Freudenberg & Co. of Weinheim, Germany, DuPont Co. of Wilmington, Del., and London-based BBA Group plc, Bryant said.
Nonwoven plastics use is rising because new hygiene products are becoming popular and new markets are emerging in Asia and South America.
Nonwovens' wicking action allows them to provide a dry layer on top of an absorbent layer.