TORONTO — Canadian apparel brand Knix Wear Inc., maker of leakproof underwear for periods and incontinence, has a new majority shareholder.

The privately held company said Friday it has agreed to sell 80 per cent of its ownership to Swedish hygiene products maker Essity for US$320 million.

Joanna Griffiths, founder and CEO of Knix, calls it “a dream come true” to partner with Essity, saying the companies share the same goals of improving customers lives.

She will hold the remaining 20 per cent stake of Knix and stay on as president.

The transaction is expected to be finalized in the second half of 2022.

Stockholm-based Essity said the deal makes it the global market leader of leakproof apparel, a product segment it expects to grow by more than 20 per cent over the next five years.

“I am delighted to welcome Knix to Essity,” Magnus Groth, president and CEO of Essity, said in a statement. “It’s a successful company with an impressive track record.”

In a webcast, he said leakproof apparel is growing quickly and replacing disposable liners and pads.

Leakproof apparel is not only more sustainable — creating 75 per cent less waste than disposable products — but also more comfortable, discreet and reliable, Groth said.

“This leads to very, very attractive growth opportunities for Essity,” he said. “It’s the fastest growing segment in in intimate hygiene.

Griffiths founded Knix in 2013 with a focus on leakproof underwear.

The Toronto-based company has since expanded into bras, shapewear, activewear, sleepwear and teen styles.

“It started with leakproof underwear and we’ve now expanded into maternity … and we have a growing leakproof swim assortment,” Griffiths said during the webcast.

“Our most recent big move has been in active,” she said. “We really believe that leakproof and active is where the next frontier is.”

“It makes a lot of sense when you think about things like sweat and the fact that many leaks happen during exercise and so we are very bullish and excited about our foray into the activewear space.”

Knix sells mainly direct-to-consumers online, offering virtual fittings and a simplified online return process. It also has six retail stores in Canada and the U.S.

Griffiths noted during the webcast that the brand has been a pioneer in the body positivity space. Its ad campaigns include people of diverse ages, sizes, races and backgrounds, often featuring stretch marks or other natural body attributes.

The total enterprise value of Knix, which has approximately 200 employees, amounts to US$400 million, Essity said.

It said Knix reported net sales of $133.6 million last year, with a sales growth of 97 per cent.

The deal with Knix comes a day after Essity announced plans to buy Australian leakproof apparel maker Modibodi.

Essity is already behind multiple brands in the feminine care and intimate apparel market including Libresse, Bodyform, Saba, Tom Organic, and Tena.

This report by The Canadian Press was first published July 8, 2022.