ASX-listed Ansell gloves up for $973m acquisition of US giant Kimberly-Clark’s Kimtech and KleenGuard brands

Protective industrial equipment and medical gloves maker Ansell will spend $US640 million ($973m) on purchasing the Kimtech and KleenGuard brands from US-based Kimberly-Clark Corporation.

Ansell on Monday entered a trading halt to announce it would fund the deal with a $400m raising through a fully underwritten institutional placement priced at $22.45 a share. It will also undertake a non-underwritten share purchase plan to raise up to $65m.

Kimberly-Clark’s personal protective equipment business (KCPPE) designs and markets differentiated hand, body and eye protection products under the Kimtech and KleenGuards brands.

The US-based consumer staples giant is also behind well-known products like Kleenex and Huggies.

Ansell said the acquisition would accelerate the delivery of its growth strategy.

“For many years, we have assessed a combination with KCPPE as one of our most attractive acquisition opportunities and I’m delighted that we have now reached agreement with (Kimberly-Clark) that the optimal path forward for this business is under Ansell ownership,” Ansell managing director Neil Salmon said.

“The Kimtech and KleenGuard brands we are acquiring and the experienced KCPPE business team behind them have strong reputations for quality and innovation built over many years of industry leadership.

“These are similar qualities to Ansell, however KCPPE has particular areas of strength across product portfolio, geographic position and sustainability differentiation that will meaningfully enhance Ansell’s overall position in the marketplace and customer differentiation.”

Mr Salmon said the acquisition would widen its portfolio of products sold into the scientific and pharmaceuticals industries, where customers include manufacturers of medical devices, semiconductors and university laboratories.

Ansell is anticipating significant synergies to result from the acquisition, with the company estimating net cost synergies of about $US10m by the third full year of ownership.

KCPPE generated a revenue of $US272m and EBIT of $US66m in the 12 months to the end of December, delivering an EBIT margin of about 24 per cent.

Ansell shares hit highs above $42 in mid-2021 at the peak of the COVID-19 pandemic when demand for personal protective equipment, including gloves and gowns, surged.

But net profit for the six months to the end of December fell 70 per cent to $US19.4m, with the company cutting about 1200 jobs during the half to address an oversupply in protective gear for pharmaceutical and laboratory workers.

Ansell’s FY24 earnings per share guidance remains unchanged at US94¢ to US110¢.

The transaction is expected to be completed in the first quarter of the 2025 financial year, subject to satisfaction of antitrust approval and other customary closing conditions.