YASTEST
ST. PAUL, Minn., Oct. 22, 2017 (GLOBE
NEWSWIRE) -- Boosting H.B. Fuller's (NYSE:FUL) problem-solving
potential, the company today announces it has finalized its
acquisition of Royal Adhesives & Sealants for $1.575 billion.
Few people realize the impact of adhesives. They are everywhere,
making virtually any durable or consumer product better. Adhesives
have the potential to make the world a better place, and H.B.
Fuller is tapping adhesives in unique ways to improve a range of
global issues.
H.B. Fuller, combined with Royal,
deepens its expertise in specialty and high-value applications used
in a range of sectors, including electronics, hygiene, medical,
transportation, clean energy, construction, and more.
Together, the companies will enable an interconnected world,
support better use of the world's finite resources, improve food
security and access to clean drinking water, and address the
challenges of a globally disperse and aging population.
"This is an exciting step for Royal
and our network of brands," said Royal Adhesives & Sealants
CEO, Ted Clark. "Combining these two businesses creates a more
capable and dynamic company for our customers and employees. We
complement each other, selling in adjacent markets with very little
customer overlap, and that presents an interesting number of growth
opportunities. We offer different technologies, expertise and
capabilities. Yet, we share the same passion for solving product
development challenges by discovering and applying innovations in
adhesive technology."
The acquisition expands H.B. Fuller's
product offering in engineering, durable assembly and construction
adhesives and makes H.B. Fuller the world's largest supplier of
adhesives for insulating glass and commercial roofing applications.
Of the top adhesives manufacturers, H.B. Fuller is the only one
singularly focused on adhesive and sealant technologies.
"We are passionate about being the
best adhesives provider in the world, and we've been investing
significantly over the last decade to make it a reality," said H.B.
Fuller CEO Jim Owens. "With complementary adhesives expertise from
Royal, we're able to make an even bigger impact on improving
people's lives. Our customers will benefit from a broader portfolio
and expanded development and production capabilities. We'll be a
more capable and dynamic company with additional opportunities for
the thousands of dedicated H.B. Fuller and Royal employees around
the world. And, the acquisition accelerates our business strategy
and positions us to exceed our 2020 targets."
H.B. Fuller also expects the combined
businesses to deliver very strong cash flow to pay down debt at an
accelerated pace. Owens adds, "With this acquisition, we have
created immediate value for shareholders based on Royal's solid
organic growth track record, high EBITDA margin and strong rate of
cash flow conversion. Looking ahead, we will now begin our planned
three-year integration, including leveraging the $15 million in
growth synergies and $35 million in cost synergies we identified
prior to closing this transaction."
A broader range of highly specified adhesives
technologies
With the addition of Royal, H.B. Fuller will be able to add more
value to its customers in key markets that require highly specified
adhesive technology. The combined companies' comprehensive suite of
products support innovative product design with the potential to
touch everything from our clothes, homes and workspaces to how we
communicate and travel.
For example, the electronification of
cars has revolutionized vehicles from mechanical machines to
electronic devices, and it is changing how vehicles are
manufactured and serviced. Together, H.B. Fuller and Royal now
bring the whole package to OEMs - from electronics
applications, interior trim, and interior and exterior lighting to
powertrain under the hood and exterior structural bonding. Royal
also brings rubber-to-metal bonding adhesives, a highly difficult
application in the automotive industry.
From engineered wood applications and
panel lamination to advancements in insulating glass, H.B. Fuller
now has one of the world's most complete lines of durable assembly
adhesive offerings. The acquisition of
Royal's KÖMMERLING business-a well-established and
respected provider of insulating glass and other high-value
adhesive and sealant applications for manufacturers of durable
goods-will enable us to leverage its well-established sales
channels to deliver this technology to a broader range of customers
in North America and to accelerate the introduction of insulating
glass sealant innovations in China and the Asia Pacific region.
The acquisition also nearly doubles
the size of H.B. Fuller's construction
adhesives portfolio. Adding to H.B. Fuller's expertise in tile
setting and flooring installation, Royal is the market leader in
the commercial low-slope roofing category. They also add
capabilities in insulation attachment and waterproof bonding.
Collectively, H.B. Fuller now advances quality building
construction from the floor to the roof.
H.B. Fuller has acquired Royal from
affiliates of American Securities LLC, based in New York with an
office in Shanghai. To learn more about the transaction,
visit www.hbfuller.com/royal.
About H.B. Fuller Company:
Since 1887, H.B. Fuller has been a leading global adhesives
provider focusing on perfecting adhesives, sealants and other
specialty chemical products to improve products and lives. With
fiscal 2017 pro forma net revenue of over $2.8 billion, H.B.
Fuller's commitment to innovation brings together people, products
and processes that answer and solve some of the world's biggest
challenges. Our reliable, responsive service creates lasting,
rewarding connections with customers in electronics, disposable
hygiene, medical, transportation, aerospace, clean energy,
packaging, construction, woodworking, general industries and other
consumer businesses. And, our promise to our people connects them
with opportunities to innovate and thrive. For more information,
visit us at www.hbfuller.com.
Safe Harbor for Forward-Looking
Statements:
Certain statements in this document may be considered
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
subject to various risks and uncertainties, including but not
limited to the following: the Royal transaction may involve
unexpected costs or liabilities; our business or stock price may
suffer as a result of uncertainty surrounding the transaction; the
substantial amount of debt we have incurred to finance our
acquisition of Royal, our ability to repay or refinance it or incur
additional debt in the future, our need for a significant amount of
cash to service and repay the debt and to pay dividends on our
common stock, and the effect of restrictions contained in our debt
agreements that limit the discretion of management in operating the
business or ability to pay dividends; various risks to stockholders
of not receiving dividends and risks to our ability to pursue
growth opportunities if we continue to pay dividends according to
the current dividend policy; we may be unable to achieve expected
synergies and operating efficiencies from the transaction within
the expected time frames or at all; we may be unable to
successfully integrate Royal's operations into our own, or such
integration may be more difficult, time consuming or costly than
expected; following the transaction, revenues may be lower than
expected, and operating costs, customer loss and business
disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers, clients or
suppliers) may be greater than expected; risks that the transaction
disrupts current plans and operations and the potential
difficulties in employee retention as a result of the transaction;
the ability to effectively implement Project ONE; political and
economic conditions; product demand; competitive products and
pricing; costs of and savings from restructuring initiatives;
geographic and product mix; availability and price of raw
materials; the Company's relationships with its major customers and
suppliers; changes in tax laws and tariffs; devaluations and other
foreign exchange rate fluctuations; the impact of litigation and
environmental matters; the effect of new accounting pronouncements
and accounting charges and credits; and similar matters. Further
information about the various risks and uncertainties can be found
in the Company's SEC 10-K filing for the fiscal year ended December
3, 2016, and its SEC 10-Q filing for the quarter ended September 2,
2017. All forward-looking information represents management's best
judgment as of this date based on information currently available
that in the future may prove to have been inaccurate. Additionally,
the variety of products sold by the Company and the regions where
the Company does business make it difficult to determine with
certainty the increases or decreases in net revenue resulting from
changes in the volume of products sold, currency impact, changes in
product mix, and selling prices. However, management's best
estimates of these changes as well as changes in other factors have
been included.
Editor note: Please visit
the online newsroom for additional supporting content
including quotes, video and photography.
Meagan Barnard
Inprela Communications
+1 612 677 2036
meagan@inprela.com
Max Marcy
H.B. Fuller Investor Relations
+1 651 236 5062
max.marcy@hbfuller.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: H.B. Fuller Company via Globenewswire
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