The Asaleo Care Ltd (ASX: AHY) share price is up 30% after announcing it’s selling its Australian consumer tissue business for $180 million.

Asaleo Care is a personal care business that sells a variety of brands including SorbetTorkLibraTenaHandeePurexTreasuresDeekoOrchid and Viti. The name Asaleo was inspired by the flower azalea which in some cultures means womanhood, and when given symbolises ‘take care of yourself for me’.

Asaleo Care’s sale

Asaleo is selling its Australian Consumer Tissue business to Solaris Paper for $180 million, resulting in a $15 million to $20 million profit. The sale includes Sorbent toilet and facial tissues, Handee Ultra paper towel and Deeko serviettes & disposable tableware.

However, it will retain its Consumer Tissue business in New Zealand including the Purex toilet paper, Sorbent and Handee. It’s also keeping the Consumer Tissue business for Fiji and the Pacific Islands.

The sale price represents a multiple of over 10x ‘pro forma’ EBITDA (click here to learn what EBITDA means).

Asaleo Care Chairman Harry Boon explained the decision:

The sale will enable us to concentrate on our core, higher margin and less capital-intensive businesses in Personal Care and B2B, and continue to innovate and invest in our brands for long-term growth.”

After the sale, the company’s debt ratio will be at the bottom of its target range of 1.5x to 2.5x.

Although the business is growing in the ‘B2B’ channel and remains a market leader in some geographies, only time will tell if this was the right decision. There may be better growth shares out there that don’t have to sell their core business such as the ones below.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).