Ansell gets a handhold in the US
Glove, condom and protective clothing supplier Ansell has boosted its position in the North American market, paying $US615 million ($672.2 million) for protective glove and boot business BarrierSafe Solutions International.
Ansell says the acquisition of BarrierSafe will place it in a leading position in many market sectors in North America.
BarrierSafe is the leading supplier of single-use gloves in the US industrial, life sciences, dental and automotive repair sectors, sectors in which Ansell is not present or does not hold a strong position.
The acquisition of BarrierSafe also allows Ansell to expand into footwear protection.
Ansell completed four acquisitions over the past financial year and acquired Korean glove maker Midas in September 2013, but none was as big as BarrierSafe.
"The acquisition of BarrierSafe ... will further enhance our position as the global leader in hand protection solutions," chief executive Magnus Nicolin said.
The purchase will lift the proportion of Ansell's total revenue generated from North America from 31 per cent to 42 per cent.
"With this acquisition, North America will be our largest region (overtaking Europe, the Middle East and Africa), which we think places us very well for what we expect to be a more favourable manufacturing environment in North America in the coming several years," chief financial officer Neil Salmon said.
The company still had the financial flexibility to pursue smaller acquisitions, but Ansell's major focus over the next year or two would be making a success of the BarrierSafe acquisition, he said.
Ansell expects to gain about $US10 million in annual cost benefits from the BarrierSafe acquisition by the end of the 2015 calendar year, mostly from supply chain savings.
Ansell will fund the acquisition via debt facilities, a share placement and a share purchase plan. It will conduct a $338 million fully underwritten institutional placement and a non-underwritten share purchase plan capped at $100 million.
Ansell shares have been placed in a trading halt while the company conducts a book-build.