HB Fuller completes $1.575bn purchase of Royal Adhesives & Sealants
US-based adhesives manufacturing company HB Fuller has finalised its acquisition of Royal Adhesives & Sealants from affiliates of American Securities for $1.575bn.
The development comes after an agreement was signed between the parties last month.
The acquisition enables HB Fuller to enhance its expertise in specialty and high-value applications.
In addition, the merger allows the company to expand its product offering in engineering, durable assembly, and construction adhesives.
Royal Adhesives & Sealants CEO Ted Clark said: "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."
The acquisition allows the company to speed-up its strategic objective of strengthening its expertise in engineering adhesives and other market segments.
HB Fuller CEO Jim Owens said: “Our customers will benefit from a broader portfolio and expanded development and production capabilities.
“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 $15m in growth synergies and $35m in cost synergies we identified prior to closing this transaction."
The acquisition of Royal’s KÖMMERLING business allows HB Fuller to reach out to a broader range of customers in North America and to expedite the introduction of insulating glass sealant innovations in China and the Asia Pacific region.
Furthermore, it is set to increase the size of HB Fuller’s construction adhesives portfolio by nearly two times.