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Avgol To Acquire Cleaver Associates

Israel-based Avgol Nonwoven Industries — a manufacturer and supplier of nonwoven fabrics for baby diapers and hygiene products — has signed an agreement to acquire the assets and operations of Wayne, Pa.-based Cleaver Associates Inc. — its exclusive distributor in North America and a nonexclusive distributor in other territories — for $7 million. Avgol will finance the acquisition, which includes the rights to the trade name Cleaver Associates, as well Cleaver's expertise, goodwill and tangible assets. Avgol also will integrate Cleaver's U.S. sales and distribution operations with its own operations. Cleaver was responsible for approximately 80 percent of Avgol's sales in 2010.

"The acquisition of Cleaver is part of Avgol's strategy of merging its external sales and distribution systems into the company's operations in order to proceed with our expansion plans in Avgol's international markets," said Shlomo Liran, CEO, Avgol Nonwoven Industries. "Recently, Avgol announced the implementation of investments that are expected to expand our production capacity to about 140 thousand tons, at an investment of about US$80 million. The production capacity will be expanded during 2011-2012 at Avgol's plant in the U.S. and on another continent. The acquisition of Cleaver is the natural progression of this strategy."

Avgol has 11 production lines — five in Israel, three in the United States, two in China and one in Russia — and manufactures more than 10 percent of the worldwide market's raw materials for diapers. The company reported revenues for the first three quarters of 2010 totaling approximately $205 million — representing 34-percent growth over the corresponding period in 2009 — and net profit for the first three quarters of 2010 totaling approximately $15.1 million.

The company does not plan to make any personnel changes, and reports Cleaver will continue marketing Avgol's products as it does currently until the end of 2012.

January 4, 2011

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