Ansell Limited (ASX: $ANN) Acquisition Announcement

Ansell Limited (ASX: $ANN) has entered into a binding agreement to acquire 100% of Kimberly-Clark's Personal Protective Equipment business (KCPPE) for US$6401 million in cash. The acquisition is expected to accelerate Ansell's growth strategy, generate economies of scale, and enhance its global position in Scientific and Industrial segments.

Executive Commentary on the Acquisition

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 K-C that the optimal path forward for this business is under Ansell ownership. With this Acquisition we are enhancing our sales of specialist products designed for clean room applications and recorded today under the Life Sciences SBU, while also widening our portfolio of products sold into Scientific verticals which include manufacturing of pharmaceuticals, medical devices and semi-conductors, and laboratories for academic and industrial research. The KimtechTM and KleenGuardTM 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. Our existing footprint, in addition to our global organisation and supply chain, creates the opportunity to generate significant synergy value from the acquisition while also enhancing our combined organic growth potential and we are excited about the benefits this will create for Ansell's customers and shareholders.

Summary of the Acquisition and Outlook

Ansell Limited (ASX: $ANN) has announced the acquisition of Kimberly-Clark's Personal Protective Equipment business for US$6401 million in cash. The acquisition is expected to accelerate Ansell's growth strategy, generate economies of scale, and enhance its global position in Scientific and Industrial segments. The company aims to achieve ~US$10 million p.a. net cost synergies by the third full year of ownership and expects the Acquisition to be mid-to-high single-digit EPS accretive pre synergies and low-teens EPS accretive including run-rate net cost synergies on a FY24 pro forma basis. The Acquisition is expected to complete in the first quarter of FY25, subject to satisfaction of antitrust approval and other customary closing conditions. Ansell's FY24 Adjusted EPS guidance remains unchanged, excluding the impact of the Acquisition and Transaction Funding. The company anticipates significant value creation opportunities for its shareholders and aims to bring leverage below 2.0x within 12 months post completion of the Acquisition, preserving sufficient headroom to maintain Ansell's credit rating.