Kimberly-Clark is set to sell its personal protective equipment business to Ansell for $640 million in cash. The Australian company will acquire Kimberly-Clark’s business, which designs, markets, and sells gloves, eyewear, and other apparel under the Kimtech and KleenGuard brands.
The deal comes as U.S. hospitals and healthcare buyers shift back towards foreign-based buyers of PPE, following a significant boost during the early Covid-19 pandemic. The industry has also faced slack demand as laboratories, hospitals, and clinics built up large stocks of gloves and other PPE equipment.
Kimberly-Clark plans to reorganize its business and overhaul its supply chain to reduce costs and streamline operations. The company is expected to book about $1.5 billion in restructuring and reorganization charges over the next three years. Ansell sees the deal as an opportunity to double down on PPE and create savings through building a larger business, including in supply chains and organization. The Australian company already sells products to healthcare and industrial companies under brands like TouchNTuff and HyFlex.
Ansell said the transaction implied a valuation of the Kimberly-Clark PPE assets of 9.7 times earnings before interest and tax, ahead of any savings and tax benefits. The deal is expected to close between July and December. Ansell will raise up to $465 million Australian dollars (US$306.0 million) to fund the acquisition and take on $377 million in additional debt.
Source: MSN
