Ansell looks to protect itself against any takeover move

For the six months to December, Ansell’s net profit surged more than 66 per cent to $US65.8m ($97.98m).

The $5bn protective gloves maker Ansell is flying high right now due to an insatiable demand for its products to combat the coronavirus.

But some do not think its soaring share price will be a deterrent for potential private equity suitors.

Ansell itself told investors after it delivered its half-year results this week that buyout funds were fiercely interested in acquiring companies operating in its space, which was why it was finding it hard to find suitable acquisition targets, with competition pushing up the price.

Currently in an extremely strong financial position, Ansell is known to be keen to buy businesses and has been looking for some time.

 

The benefits for the group in doing so could be two-fold.

First, acquisitions would enable the business to boost earnings, but second, it would also be a defensive play at a time when suitors could be knocking at its door.

While expensive, Ansell is considered a strong performer and a highly defensive business, and at a time when debt is cheap, private equity may take a leap of faith that they can increase the value of the operation even further.

The company told investors of its international expansion plans, which involve opening its first factory in Russia and potentially one in the US, with consumers in both countries being urged to buy locally produced products.

For the six months to December, Ansell’s net profit surged more than 66 per cent to $US65.8m ($97.98m), while its revenue increased 3.9 per cent to $US753.3m.

Shares fell after analysts had even higher expectations of a strong performance.