H.B. Fuller announced that it has made a recommended cash offer to acquire Advanced Medical Solutions Group.
H.B. Fuller is the world’s largest pure-play adhesives company. Advanced Medical Solutions is a medical technology company focused on surgical adhesives, tapes, dressings, and formulated biosurgicals.
Under the terms of the offer, eligible Advanced Medical Solutions shareholders will receive £2.85 per share in cash. The offer implies a total enterprise value of £715 million.
The transaction is expected to expand H.B. Fuller’s capabilities in attractive and high-growth medical segments. H.B. Fuller said medical is a core strategic growth market due to durable demand trends, high regulatory-based barriers to entry, and strong margin characteristics.
Advanced Medical Solutions brings a portfolio of differentiated surgical adhesive technologies and an innovation-led platform. The acquisition is expected to expand H.B. Fuller’s total addressable market by $15 billion to $95 billion.
H.B. Fuller said Advanced Medical Solutions’ dedicated pan-European salesforce across healthcare markets, hospital systems, and specialty distributors is expected to create immediate cross-selling opportunities for H.B. Fuller’s current portfolio.
Advanced Medical Solutions is also expected to benefit from H.B. Fuller’s U.S. infrastructure and distribution relationships as the combined company seeks to accelerate U.S. penetration.
The deal is expected to strengthen H.B. Fuller’s R&D, manufacturing, and regulatory capabilities. Advanced Medical Solutions has a dedicated R&D team of more than 75 people and a track record of product launches.
The combined company will also bring together H.B. Fuller’s medical facilities in the U.S. and Italy with Advanced Medical Solutions’ manufacturing base in the U.K., Germany, France, the Netherlands, Thailand, and India.
H.B. Fuller expects to capture about $55 million, or approximately £41 million, in combined run-rate revenue and cost synergies by 2031. These synergies are expected to come from areas including public company cost elimination, expense rationalization, and sourcing savings.
Advanced Medical Solutions is expected to increase H.B. Fuller’s annual revenue by approximately $300 million while supporting a positive portfolio mix shift. The deal is also expected to accelerate H.B. Fuller’s path toward its long-term targets of 5% annual constant-currency revenue growth and EBITDA margins above 20%.
The acquisition will be financed through 100% committed financing. H.B. Fuller expects to deleverage to its target range of 2.5x to 3x within two years after the transaction closes.
The transaction is subject to Advanced Medical Solutions shareholder approval, regulatory approvals, and customary closing conditions. It is expected to close by the end of the calendar year.
Perella Weinberg Partners and Goldman Sachs are serving as financial advisors to H.B. Fuller. Ashurst and Perkins Coie are serving as legal counsel.
KEY QUOTES:
“This transaction is a rare opportunity to advance the evolution of our portfolio.”
“We have long been clear that medical is a core strategic growth market for H.B. Fuller given its durable demand trends, high regulatory-based entry barriers, and margin profile. Accordingly, we have thoroughly analyzed this structurally scarce market to identify the most attractive assets and growth opportunities.”
“Advanced Medical Solutions has built an exceptional business as a differentiated formulator with an innovation-led platform, an outstanding product suite, impressive R&D capabilities, and a global commercial footprint with supporting regulatory expertise. The transaction is expected to result in significant revenue and cost synergies, and accelerate our transformation into a higher-growth, higher-margin business. We remain committed to disciplined and balanced capital allocation and believe that the continued up-tiering of our portfolio, as well as the other steps we are taking to improve our cost structure and cash flow profile, will allow for robust de-leveraging post-acquisition.”
Celeste Mastin, President and CEO of H.B. Fuller
