Ansell (ANN) has returned to the acquisition trail, this time with a $US600 million plus deal to buy a major glove and protective wear rival in the US. It is the second purchase by Ansell in the past two months.
The proposed acquisition – from private equity owners – of BarrierSafe Solutions International for about $US615 million, will require Ansett to raise $A338 million from a share issue to help fund the purchase.
Ansell shares were placed in a trading halt yesterday at $19.46, Monday’s closing price when the purchase was announced before trading started.
The company will conduct a bookbuild to help fund the acquisition.
The fully main part of the funding is the underwritten institutional placement as well as a non-underwritten share purchase plan capped at $A100 million.
The remainder of the acquisition will be funded through a $US300 million debt facility.
The trading halt is expected to remain in place until tomorrow.
ANN YTD – Ansell buys US glove maker for $670m
The fund raising adds to the drain of cash from local investors. Australand’s biggest shareholder, CapitaLand of Singapore, is taking $A400 million for selling 20% of Australand’s shares, Virgin is looking to raise $350 million, and there are several floats that could mop up $2 – $3 billion between them, including Nine Entertainment Co, Veda, Dick Smith and Covermore.
Ansell is already the world’s largest glove maker and a maker of condoms, and the BarrierSafe deal will extend its penetration in the single-use glove market (such as in hospitals).
Ansell said yesterday the acquisition will make a small contribution this financial year, and a large one the following year.
BarrierSafe produces single-use gloves and protective footwear and employs around 250 people in the US and southeast Asia.
The acquisition follows Ansell’s purchase of Korean glove maker Midas for $US40 million, announced in September.
The agreement is subject to US anti-trust clearance and and other regulatory approvals and is expected to be finished in the March quarter of next year.
“The acquisition of BarrierSafe is a rare opportunity to strengthen the position of Ansell in the core North American single-use glove market and will further enhance our position as the global leader in hand protection solutions,” said Ansell CEO Magnus Nicolin in yesterday’s statement.
“The acquisition represents another strategic move in fulfilling our growth objectives in target industry verticals and is consistent with our disciplined approach to mergers and acquisitions, with an EBITDA multiple similar to that paid by Ansell in other recent transactions."
He said that BarrierSafe CEO Michael Mattos and COO/CFO Joseph Kubicek "will become part of the Ansell leadership team on completion of the transaction, and I expect BarrierSafe senior management to play important roles in the success of the combined business going forward”.
Mr Nicolin said Ansell "expects to achieve significant cost synergies primarily from supply chain savings as well as increased revenue opportunities from cross-selling and vertical development".
