In a major move, hygiene and health products provider Essity AB (ETTYF) has picked up an 80% stake in Knix Wear Inc. The latter offers leakproof products for periods and incontinence.
Through this $320 million acquisition, Essity has now become a leader in leakproof apparel across the globe, which is the fastest-growing subset of the intimate hygiene market.
Essity already caters to this subset with its Libresse, Bodyform, Saba, TOM Organic, and TENA brands.
The President and CEO of Essity, Magnus Groth, commented, “Essity is now becoming the global market leader in leakproof apparel, which is an important step towards our goal of being the world’s fastest-growing company in intimate hygiene, providing increased well-being for customers and consumers.”
Knix is present in Canada and the U.S. and chiefly sells direct to consumers through online channels and six retail outlets. The transaction is anticipated to close in H2 2022 and pegs Knix’s enterprise value at $400 million.
Analysts’ Take on Essity
The Street currently has a Moderate Buy consensus rating on Essity alongside a $25.91 average price target, which implies the stock is fairly priced at current levels.
Societe Generale analyst Victoria Nice is more optimistic about Essity and has reiterated a Buy rating on the stock alongside a $30.17 price target. This implies a 15% potential upside.
Closing Note
This acquisition is a major move for Essity. Knix has been witnessing rapid growth and saw its top line expand by 97% in 2021. The strategic move can be expected to boost Essity’s fortunes in the coming periods.
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