Acquisitive Sweden-based hygiene and health company Essity has picked up fast-growing Australian leakproof underwear brand Modibodi in a deal worth $140 million.
The sale has been struck at a healthy premium of more than 24 times EBITDA, which is backed by Modobodi’s strong margins and annual sales growth of 18 per cent.
The acquisition caps off an 11-year journey for Modibodi founder Kristy Chong since she first began developing her range of disposable incontinence products after the birth of her second child.
Modibodi, which was officially established in 2013, has grown to become a global company with annual sales of $56.7 million and EBITDA of $5.7 million in 2021.
The company markets a range of sustainable leakproof apparel for periods and incontinence including underwear, swimwear, activewear and maternity wear through an online, direct-to-consumer business model, with a growing sales base in retail channels.
Essity says the acquisition capitalises on the strength of the leakproof apparel sector which is expected to grow by more than 20 per cent a year over the next five years. It’s a market in which the company already has a foothold with brands such as Libresse, Bodyform, Saba, TOM Organic and TENA.
“The acquisition of Modibodi strengthens Essity’s position in leakproof apparel and enables faster growth within better-for-you, better-for-the-planet solutions,” says Essity CEO Magnus Groth.
“Modibodi has the qualities we are looking for with leading market positions, strong brand and sustainability credentials as well as excellent digital marketing and e-commerce capabilities.”
Chong, a social advocate for women's health issues and rights, is confident the Modibodi brand will continue to grow after it joins the Essity stable.
“I am proud of all we have created at Modibodi over the past nine years and pleased that Modibodi is joining Essity,” she says.
“As a global leader in hygiene and health, Essity can provide the expertise and capital to take the brand forward during its next phase of growth and achieve even greater impact.”
Modibodi employs a staff of 45 in Sydney. It is unclear whether the acquisition will lead to any job losses once the deal is finalised in the second half of this year.
A day after announcing the Modibodi takeover, Essity, which has 46,000 employees worldwide, announced it was also snaring an 80 per cent stake in Canadian company Knix Wear Inc., a leading provider of leakproof apparel for periods and incontinence. That deal is pitched at US$320 million ($469 million).
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