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NORCROSS, Ga. - Tyco International said today its health care division is buying Paragon Trade Brands Inc., the largest generic maker of disposable diapers in the United States and Canada, for $565 million, The Associated Press reports.
Paragon's disposable diapers and training pants are sold as generic brands at supermarkets, pharmacies and major retailers such as Wal-Mart.
Tyco is paying $43.50 per share in cash for Paragon. It is also assuming $85 million in Paragon debt. The deal is subject to regulatory approvals.
Paragon was sold by Wellspring Capital Management LLC of New York, which purchased 97 percent of Paragon in January 2000, after the diaper maker filed for bankruptcy two years earlier. Wellspring began seeking a buyer in June.
Tyco Healthcare, based in Mansfield, Mass., will use Paragon to expand its business in the diaper market, Tyco spokeswoman Maryanne Kane said.
"We believe that the size and strength of Tyco will allow our business to continue to grow to a degree even beyond what we have been able to accomplish," said Michael Riordan, Paragon's chairman and chief executive.