Market observers say it will be interesting to see Ansell shares move after it announced the acquisition of the Kimberly-Clark’s Personal Protective Equipment business for $US640m ($973m) on Monday.
The $3bn rubber gloves maker has struggled to win favour with its investor base over many years with a string of profit downgrades, but a number of sources say part of the challenge is it’s exposed to commodity prices, which are out of its control. Private equity has thought about an acquisition in the past but has never got its head around the reasons for all the earnings misses, and firms have walked away after running the ruler over it.
Ansell now needs to deliver on this deal to gain market credibility, with frustration building over another acquisition in the industrials space, namely Orora’s Saverglass deal last year.
Kimberly Clark is selling after flagging last month it was “sharpening its strategic focus to 12 strong brands with number one or two positions in the market”.
The US-based listed group has created three units – North America, International Personal Care and International Family Care and Professional Care.
The focus on successful units is similar to what Australian investors are calling for among poorer performing corporates here.
Ansell is tapping the market for $400m through a placement run by Goldman Sachs. It will also source $US377m through new debt and launch a share purchase plan for up to $65m.
Shares are being sold at $23.89 each, a 6 per cent discount to their last close.
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