H.B. Fuller acquires Royal Adhesives and Sealants

US-based Royal Adhesives & Sealants is a global developer and manufacturer of proprietary, high-performance adhesives and sealants. It offers a broad range of specialty formulated products for complex bonding, laminating and sealing applications across a diverse range of markets, including aerospace and defense, automotive, recreational vehicle, bus, truck and trailer, rail, marine, insulated glass, solar, wind, assembly, electrical, electronics, filter, printing, packaging, laminating, roofing and flooring. The company offers a broad spectrum of customized thermosetting epoxy and urethane, solvent-based and water-based technologies for demanding adhesive and sealant applications

With this acquisition, H.B. Fuller gains product technology, people and skills that will result in a more capable and dynamic company for customers and employees, the company stated.

The agreed upon purchase price is 1.575 billion USD, subject to customary adjustments. Upon closing the transaction, H.B. Fuller will be a company with nearly 2.9 billion USD in revenue, focused on profitable growth in engineering, durable assembly, and construction adhesives markets.

Jim Owens, H.B. Fuller president and CEO, commented: ‘This accretive acquisition accelerates realization of our 2020 strategic objective to focus and grow in engineering adhesives and other highly specified market segments, while exceeding our targeted cash flow, EPS and EBITDA margin targets.

‘With Royal’s strong customer relationships and experienced team, we will add depth and breadth to our portfolio. Royal’s complementary offerings will expand our presence in North America, Europe and China, and add new technology and capabilities.’

Owens added that 35 million USD in cost synergies and 15 million USD in growth synergies have been identified, and are expected to be realized over the next three years as a result of merging these two businesses.

Royal Adhesives & Sealants is expected to generate approximately 650 million USD in revenue and 138 million USD in adjusted EBITDA for H.B. Fuller’s fiscal year 2017. H.B. Fuller has previously announced specific financial goals for organic growth, cash flow and EBITDA margin improvement in the company’s 2020 strategic plan and believes this acquisition will support acceleration and over performance relative to these objectives.