Ansell to acquire Kimberly-Clark’s PPE business for almost $1b
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The news: Ansell is set to acquire Kimberly-Clark’s personal protective equipment business (KCPPE) for USD640 million ($973.96 million).
The numbers: The funding for the acquisition will be through two avenues — USD263 million in a fully underwritten institutional placement and USD377 million of committed new debt.
The placement will be conducted at a fixed price of $22.45 per new share and will result in approximately 17.8 million new shares being issued, representing around 14% of Ansell’s existing issued share capital. Ansell’s share price last closed at $23.89.
Ansell will also undertake a non-underwritten share purchase plan offered to eligible shareholders to raise up to $65 million.
Ansell said the transaction funding would result in leverage of 2.3x pro forma for EBITDA during the 2023 calendar year. It noted that it expected deleveraging through strong cash flow generation to bring leverage below 2x within 12 months post completion of the acquisition.
A USD10 million per annum run-rate net cost synergies is expected to be achieved by the third full year of ownership.
On its financial year outlook, the placement is expected to reduce FY24 adjusted earnings per share by 1 to 2 US cents and one off transaction costs are expected to be around USD24 million.
The context: Ansell said the acquisition would improve its position in chemical protective clothing, improve Ansell’s product life cycle sustainability through the ownership of KCPPE’s product recycling service, strengthen its EBIT margin, offer scale benefits through the combined supply chain and organisation teams, and value creation.
The transaction is expected to complete during the first quarter of financial year 2024 subject to antitrust approval and other customary closing conditions.
What they said: Ansell managing director and CEO Neil Salmon said: “With this acquisition we are enhancing our sales of specialist products designed for clean room applications and recorded today under the Life Sciences SBU, wile also widening our portfolio sold into scientific verticals which include manufacturing of pharmaceuticals, medical devices and semiconductors, and laboratories for academic and industrial research”.
The source: ASX announcement
