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Comparatively, the sexual wellness division climbed 3% and medical products grew by 4%.
Today’s announcement of a $615 million acquisition of US single-use medical glove maker BarrierSafe is another step in the right direction for the struggling division. The deal is subject to U.S. anti-trust clearance but is expected to be given the green light, with the sale to be completed by the end of first half of next year. The deal will be structure through a $300 million debt facility and a fully underwritten share purchase plan for A$338 million.
In a statement to the market, ANN’s stated: “BarrierSafe is the leading North American provider of single-use gloves. 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”.
It remains a key part of ANN’s long term strategy that bolt-on business will be key to future success, and with BarrierSafe currently generating US$290 million in revenue, it is expected to be accretive excluding transaction costs and one-off integration costs.
This is the second global acquisition in as many months; in late September ANN brought South Korean-based glove-maker Midas for $40 million. Midas is believed to generate $30 million in revenue turn over and has market presence across the Japanese and South Korean markets.
With the HyFlex glove and plastics division making up 40% of total EBIT, the decline in sale – particularly in Asia and Europe – has been concerning for ANN’s management, and today’s acquisition continues the current ANN’s mantra of buying its way out of the flat spots.
I see FY14 being a stable year for earnings because revenue is being sourced from the acquisition of other companies, and this method may continue into the future.