Predictably there were a few jokes in reports and the market about a deal with a "midas touch" after protective clothing and condom maker Ansell (ANN) revealed yesterday it was buying a key supplier, South Korean glove maker and textile group Midas.
But from what Ansell said yesterday about the deal, Midas will be a good ‘fit’.
Ansell will pay more than $US41 million ($A43 million) to expand deeper into that market. There is a further $US6 million in debt.
The shares rose 37c, or 1.8% to $20.88 as shareholders liked the shape of the deal.
ANN YTD – Ansell picks up South Korean supplier
In its statement to the ASX, Ansell said the purchase "will provide it with new manufacturing capabilities in specialised yarn and polyurethane technology, which will be important in accelerating growth of the company’s HyFlex range.
‘‘This acquisition represents another step designed to drive Ansell forward, fulfilling our growth strategy of accelerating innovation, developing our manufacturing and sourcing capabilities and building leadership position in emerging markets,’’ Ansell chief executive Magnus Nicolin said.
Midas is a privately owned company and Ansell said it has sales of around $US30 million a year. (Some of those sales would be to Ansell, seeing Midas is a supplier.)
Midas is a manufacturer and supplier of knitted, cut resistant industrial gloves with expertise in polyurethane coatings and yarn wrapping. It has cost effective and highly efficient plants in South Korea and Vietnam with approximately 300 employees. It has been an important supplier to Ansell for some eight years.
“Midas is a well-respected company and its technologies, manufacturing capabilities and product range complement and extend our industrial and specialty markets offering.” said Mr Nicolin said.
“This acquisition represents another step designed to drive Ansell forward, fulfilling our growth strategy of accelerating innovation, developing our manufacturing and sourcing capabilities and building our leadership position in emerging markets.”
In the year to June Ansell reported a 10% lift in sales to $US1.3 billion and a full-year net profit of $136.8 million, up 5.2%.
