Thai Company in Talks to Buy Israeli Fabric Firm Avgol for $470 Million – Avgol Industries, an Israeli maker of nonwoven fabrics used in disposable diapers and other products – Thai Company Israeli Fabric Firm Avgol Indorama
Avgol Industries, an Israeli maker of nonwoven fabrics used in disposable diapers and other products, said on Tuesday its two controlling shareholders were in talks to sell their stakes.
The announcement didn’t offer further details, but sources said the buyer was Thailand’s Indorama Ventures, which is offering to buy control in a deal valuing the entire company at 1.7 billion shekels ($470 million).
That works out to 5.80 shekels a share, a 60% premium on Avgol’s closing price on Monday before the announcement. The news sent shares of Avgol up 6.5% to 3.85 shekels on the Tel Aviv Stock Exchange, although Avgol said there was no certainty the talks would lead to a sale.
The news came a day after another Israeli manufacturer, Frutarom, a maker of flavors and fragrances, agreed to be acquired by International Flavors & Fragrances for $7 billion, making it the second-biggest takeover of an Israeli company after Intel purchased Mobileye last year for $15.3 billion.
Avgol has been through a difficult period, with its share price down 20% in the 12 months through Monday. The last year has seen prices for resin, its chief raw material, rise sharply, cutting pre-tax profits 80%, to just $1.8 million, in the fourth quarter of 2017.
However, its sales have continued rising, and after a 12.7% increase year on year in the quarter, it breached the $100 million mark for the first time in the company’s history.
A source close to the talks told TheMarker that Indorama, a publicly traded industrial group based in Bangkok, is prepared to a pay a premium for Avgol. “It has factories all over the world and a global customer base, so it has room to grow,” said the source, who asked not to be named.
Indorama, a global chemicals company controlled by the by Indian businessman Aloke Lohia with 75 production sites in 25 countries and 2017 revenue of $8.4 billion, had not commented on any talks by press time.