By Sarah White and Anjuli Davies
MADRID/LONDON, Oct 16 (Reuters) - Spanish buyout firms Portobello and Santander's Vista Capital, are selling diaper maker Indas, and have attracted a bid from Canadian paper group Domtar Corp among others, banking and private equity sources said.
Indas, which was bought by the two Spanish private equity firms in 2007 for about 350 million euros, is Spain's top maker of incontinence pads and other hygiene products and exports to several European countries as well as Latin America and Africa.
Domtar has been buying diaper makers in the United States and Europe in the past two years to expand its personal care business and lower its exposure to weak pulp prices.
Other firms such as U.S. private equity firm Blackstone had also looked at Laboratorios Indas, which could fetch between 300 million and 400 million euros ($540 million), but Blackstone was unlikely to stay in the running, two sources said.
Portobello Capital, Vista and Blackstone declined to comment, while Domtar said it would not comment on speculation. Five people familiar with the matter confirmed that Indas was up for sale.
Ageing populations across the world have pushed up demand for incontinence products - sales of adult diapers are set to overtake baby ones by next year in Japan, according to research firm Euromonitor.
Spain is one of the European Union countries where the median age has risen the most over the past decade, but deep spending cuts in the recession-hit country have also hurt businesses in recent years.
A banking source said Portobello and Vista had bought the business for around 12 times earnings before interest, taxes, depreciation and amortization, but would be selling it now at about 7 or 8 times Ebitda, if the deal goes ahead.
This source put Indas' 2013 Ebitda at around 50 million euros, although other sources could not confirm the figure.