TYCO BUYS WAL-MART DIAPER MAKER

Private-Label Brand Has Seen Sales Surge to $530 Million

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CINCINNATI (AdAge.com) -- Global conglomerate Tyco International, Norcross Ga., is getting into the fast-growing private-label diaper business.

The company announced today a proposed acquisition of Paragon Trade Brands, the once-struggling but recently surging maker of private-label diapers for Wal-Mart Stores and other retail chains in the U.S.

Tyco plans to

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buy Paragon in a deal, subject to regulatory review, valued at $650 million. The purchase comes only two years after Paragon emerged from a Chapter 11 bankruptcy brought on by settlements of patent litigation from Kimberly-Clark Corp., maker of Huggies, and Procter & Gamble Co., maker of Pampers.

Paragon later became maker of Wal-Mart Stores’ fast-growing White Cloud diaper brand, and has seen its overall sales surge 36% to $530 million for the nine months ended Sept. 30.

Tyco, a Bermuda-based conglomerate, had sales of $19.2 billion last year in such far-flung businesses as underseas telecommunications cables and disposable medical products.

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