H.B. Fuller (FUL) To Divest Non-Adhesive Business To Tiarco
Zacks Investment Research | Jun 12, 2019 08:01AM ET
H.B. Fuller Company (NYSE:FUL) announced that it will divest its surfactant, thickener and dispersant business to a subsidiary of Textile Rubber and Chemical Company, Inc. — Tiarco, LLC. Tiarco offered to purchase the aforementioned business for $71 million.
It is worth mentioning here that H.B. Fuller’s shares increased 0.51% yesterday, closing the trading session at $43.36.
Tiarco is primarily engaged in developing latex additives, grease & lubricant additives, reservol, and water treatment additives for use in custom/toll manufacturing, grease & lubricant, and other markets. It is based in Dalton, GA.
Brief Discussion on Divestment Deal
Of H.B. Fuller’s to-be-divested business, surfactants are mainly used in wetting agents, foam boosters (applied in healthcare and beauty products) and detergents. Thickeners are applied in floor coatings, carpet, caulk formulations and adhesive.
The to-be-divested business generated revenues of $25 million in fiscal 2018 (ended Dec 1, 2018), and earnings before interest, tax, depreciation and amortization of roughly $8 million. This business became part of H.B. Fuller with the latter’s acquisition of Royal Adhesives and Sealants in October 2017.
This divestment transaction will enable H.B. Fuller to concentrate on its core (adhesive solutions) businesses as well as using net proceeds to pay down debts. Closure of the transaction is expected in the third quarter of 2019.
Inorganic Activities of H.B. Fuller
For strengthening its business growth opportunities, the company not only favor divestment of non-core businesses but also believes in making acquisitions.
Since acquired in 2017, the buyouts of Adecol Industria Quimica, Limitada; Royal Adhesives and Sealants; and H.E. Wisdom & Sons, Inc. and its affiliate Wisdom Adhesives Southeast, L.L.C. have been strengthening H.B. Fuller’s businesses.
Zacks Rank & Stocks to Consider
With a market capitalization of nearly $2.2 billion, H.B. Fuller currently carries a Zacks Rank #3 (Hold).
In the past 60 days, the Zacks Consensus Estimate for the company’s earnings remained unchanged at $3.29 for fiscal 2019 (ending November 2019) and $3.98 for fiscal 2020 (ending November 2020).
H. B. Fuller Company Price and Consensus
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.