Ansell Limited, a global leader in protection solutions, today announces that it has reached an agreement to acquire BarrierSafe Solutions International, a leading North American provider of single-use gloves, for a total consideration of approximately US$615 million, subject to certain adjustments (the "Acquisition"), from Odyssey Investment Partners and others. Founded in 1987, BarrierSafe has sales of approximately US$290 million per annum. With the Acquisition, Ansell further expands its position in the hand protection market in North America and continues to implement its strategy to create shareholder value through organic and acquisition driven growth.
The agreement is subject to U.S. anti-trust clearance and customary closing conditions. It is expected to complete during the first quarter of calendar year 2014.
The Acquisition and associated transaction costs will be funded by a committed debt facility of US$300 million as well as the raising of new equity through a fully-underwritten private placement of A$338 million (US$308 million) and a portion of a non-underwritten share purchase plan (SPP) of up to A$100 million (US$91 million) to all eligible shareholders in Australia and New Zealand.
"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 Magnus Nicolin, Chief Executive Officer and Managing Director at Ansell. "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. I am also delighted to confirm 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."
BarrierSafe is the leading North American provider of single-use gloves to core Ansell growth verticals like Industrial, Auto Aftermarket, Emergency Medical Services, Dental and Life Sciences, all under the flagship brand Microflex®. BarrierSafe also manufactures and distributes a market leading range of Onguard™ branded protective footwear. BarrierSafe has approximately 250 employees in locations across North America and Southeast Asia.
Ansell expects to achieve significant cost synergies primarily from supply chain savings as well as increased revenue opportunities from cross-selling and vertical development.
On a normalised basis, excluding non-recurring costs (transaction costs and one-time integration expenses), the acquisition is expected to be accretive to EPS in the low-single digit % in F'14 and in the mid-single digit % in F'15.
After including non-recurring costs the acquisition is expected to be marginally dilutive to reported EPS in F'14 and accretive to reported EPS by a low-to-mid-single digit % in F'15.
UBS is acting as the sole financial adviser to Ansell, and Drinker Biddle & Reath LLP and Baker & McKenzie are its legal advisers.