Great Neck, New York and Prague, Czech Republic: 22nd May, 2018 – R2G, a family office based in Prague, Czech Republic which owns majority interest in PEGAS NONWOVENS a.s., and First Quality Enterprises, Inc. today announced that the two companies have entered into a definitive agreement under which R2G will acquire 100% of First Quality’s nonwovens operations in the United States and China. The transaction, which is subject to customary closing conditions, is expected to be completed early in the third calendar quarter of 2018.
R2G's nonwovens business PEGAS NONWOVENS a.s. is a leading producer of nonwoven textiles with operations in Europe and Africa. The acquired operations will continue, post transaction, to supply nonwovens to First Quality’s U.S. absorbent hygiene division; which manufactures premium infant care, adult incontinence, and feminine hygiene products for the retail and health care markets. This strategic acquisition will expand R2G’s presence into North America and Asia and will act as a fantastic platform for growth in these two important markets.
Michal Smrek, Chief Executive Officer of R2G said, “We believe strongly in the nonwovens business. This transaction will enable us and our group companies to support our global customers across four continents. Post transaction, we will have state-of-the-art production facilities and unrivalled know-how and R&D expertise to ensure that our customers benefit from the premium products we offer and the joint innovation and synergies that this combination will bring. When we acquired PEGAS, we said that this was the first step to building a global platform. This transaction is the second step and we look forward to now investing into our global platform and the people that have made the production companies a success.”
Jim Dodge, Chief Financial Officer of First Quality Enterprises said, “In the past 21 years, we have built First Quality Nonwovens into a global leader in the nonwovens industry through strategic investments, strong product development, and differentiation; with full commitment to our workforce, customers, and our communities in Hazleton, Pennsylvania and Wuxi, China. We are very pleased to pass along this legacy to a company which shares our principles and values. While it is extremely difficult to part with our nonwovens division and the fantastic team members that work there, we are pleased that, following the completion of the transaction, they will be part of the R2G family of nonwovens companies with similar core values as the First Quality Group. We are also excited about continuing to work closely with them in the years to come as they continue to supply First Quality with premium nonwoven materials. We would like to express our sincere appreciation and gratitude to our entire workforce for their tireless dedication for the last 21 years.”
Goldman, Sachs & Co. LLC served as financial advisor and Wachtell, Lipton, Rosen and Katz served as counsel to First Quality. Dentons served as counsel to R2G. CSOB bank, together with KBC Bank N.V branch in New York, arranged debt financing for the acquisition by R2G.
R2G is a family office based in Prague, Czech Republic, which was established by industrialist Oldrich Slemr in 2016. R2G’s goal is to preserve and grow capital through investments geared to long-term growth. Investments are implemented through an investment platform backed by three families: the Slemr family and the families of software entrepreneurs and major shareholders in London Stock Exchange listed anti-virus company AVAST, Eduard Kucera and Pavel Baudis.
ABOUT FIRST QUALITY ENTERPRISES, INC.
Founded in 1990, First Quality Enterprises, Inc. and its affiliates are a closely-held diversified group of companies manufacturing, selling and distributing branded and private label absorbent hygiene, paper and packaging products into the healthcare, retail and commercial channels. First Quality is dedicated to meeting the demands of the market by providing innovative and high-quality products manufactured utilizing state of the art technology. For more information please visit www.firstquality.com