Advanced Medical Solutions (AMS) shareholders have approved the planned sale of the company to H.B. Fuller for £715 million. The approval, which H.B. Fuller disclosed on Thursday, clears a barrier to the completion of the deal while H.B. Fuller expects to complete the takeover by the end of the year. Buying AMS, a U.K. manufacturer of tissue-healing technologies, will further H.B. Fuller’s goal of growing its medical earnings before interest tax, depreciation and amortisation to $100 million in the near term.
H.B. Fuller, which makes adhesives and sealants for industries, including aerospace and packaging, has identified medical as one of the most attractive end markets for its products. Aging populations and rising chronic conditions could drive sustained growth in demand for medical adhesives and sealants, leading H.B. Fuller to buy Tissue Seal, Adhezion Biomedical, Medifill and GEM in recent years. “This is a fragmented, highly specialized market with meaningful barriers to entry, including regulatory approvals, clinical validation and rigorous customer qualification.
“We have been very intentional about increasing our exposure to medical over the last several years through both focused acquisitions and organic investment,” H.B. Fuller chief executive, Celeste Mastin said on an earnings call in June. Mastin was speaking the day H.B. Fuller unveiled a deal to buy AMS. With AMS shareholders backing the sale this week, H.B. Fuller is advancing toward the completion of a deal that will significantly expand its medical unit.
H.B. Fuller reported $68 million in medical adhesive sales last year. AMS’ revenues were $302 million. H.B. Fuller calculates that medical sales will account for 10 percent of its business once the deal closes, adding a fourth growth driver to an organization currently reliant on adhesives for the building, engineering and hygiene, health and consumable markets.
H.B. Fuller received an unsolicited offer to sell the building unit this week. Buying AMS will move H.B. Fuller into the markets for formulated biosurgicals and mechanical closures, while expanding its portfolio of surgical adhesives, tapes and dressings. AMS’ portfolio of formulated biosurgicals includes antibioticcoated collagens and bone scaffolding devices.
Surgical adhesives and mechanical closures are AMS’ largest units, collectively accounting for twothirds of its sales last year. H.B. Fuller expects the deal to generate about $55 million in synergies, split between $20 million in commercial gains and $35 million in savings.
The commercial synergies reflect cross-selling opportunities that H.B. Fuller expects to unlock once it gains access to AMS’ direct surgical sales force in Europe. H.B. Fuller has identified the elimination of overlapping administrative activities as a way to cut costs.
