Saying that the recently announced purchase of Hypermarcas checks off all five of Ontex’s acquisition strategy goals, CEO Charles Bouaziz called the transaction, which will close in the first quarter, a key milestone for the Belgian company. By integrating Hypermarcas into its business, Ontex is growing its presence in adult incontinence, increasing its presence outside of Western Europe, strengthening its branded businesses, achieving attractive returns and synergies and integrating achievable operational and commercial disruptions, the company’s chief told investors and analysts shortly after the acquisition was announced last month.
 
With annual sales of €343 million, Hypermarcas has a number one position in the Brazilian adult incontinence market with its established Bigfral brand as well as its newer, value-oriented Adult Max line. The inclusion of these lines, which represent about 22-25% of Hypermarcas’ total business, will increase growth in this category from 5.6% to 7% for Ontex.
 
The acquisition will bring Ontex’s sales outside of Western Europe to 53%, marking the first time sales outside of Western Europe have been larger than within. It will also make Ontex’s branded sales larger than its private label offerings for the first time in its history. In addition to its adult incontinence business, Hypermarcas has three diaper brands—PomPom, a 50-year-old premium and intermediate brand; Cremex, a Disney-themed intermediate offering and Spaeka, a region leader in the value segment. Hypermarcas diapers hold the number three position in Brazil, behind Kimberly-Clark and Procter & Gamble.
 
“The main reason for the sustainable success of this business is the brand portfolio,” Bouaziz says. “It addresses the needs across different consumers and price points.”

The acquisition of Hypermarcas also strengthens Ontex’s foothold in the Americas, where it already operates a business, acquired from Mexico-based Grupo Mabe in 2015. These two businesses will be joined together under Ontex’s America’s division.
 
“We now literally have two feet on the ground in the Americas with positions in Mexico and Brazil,” Bouaziz says. “We are focused on growth and it is exactly these kinds of markets that have the long term growth to support this strategy.”
 
Ontex was also impressed by the diversity of Hypermarcas’ customer base. Its top 10 clients, including wholesalers and distributors, represent just 39% of sales and the company’s brands have a strong presence among the top four grocery chains and three pharmacies in Brazil, the fourth largest market for hygiene products, behind China, the U.S. and Japan.
 
The acquisition of Hypermarcas represents the fifth by Ontex since 2010. In addition to Mabe, recent acquisitions have included Serenity, lille healthcare and iD. Like, Hypermarcas, these businesses have helped Ontex expand in branded business and grow its sales in adult incontinence, but only Mabe and Hypermarcas has increased the company’s foothold outside of North America.
 
The absorbent products sale is the latest of several made by Hypermarcas as it has sought to sharpen its focus on its pharma business. In 2015, the compay sold its cosmetics business to Coty and its condom business to Reckitt Benckiser. Executives say the revenues from these sales will go toward new investments in the pharmaceutical realm.