H.B. Fuller (FUL) to Acquire Industrial Adhesives Biz of Forbo Group in ~$394M Deal

H.B. Fuller Company (NYSE: FUL) has signed an agreement to purchase the global industrial adhesives business of Forbo Group. The acquisition will enhance H.B. Fuller's position as a global leader in the adhesives industry. The business to be acquired represents about 80 percent (by revenue) of the Forbo Bonding Systems division of Forbo Group. This business will generate approximately $580 million in revenue for the fiscal year ending December 31, 2011, operates 17 manufacturing facilities in 10 countries, and employs more than 1,100 people globally. Projected EBITDA for the business for the 2011 fiscal year is CHF 31 million, or about $35 million at 2011 actual exchange rates.

The purchase price for the transaction is CHF 370 million on a debt-free and cash-free basis, or about $394 million at current exchange rates. The consideration will be paid in cash at the time of closing. H.B. Fuller has committed financing from Morgan Stanley Senior Funding, Inc., Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A. to support the completion of this transaction. Prior to closing the acquisition transaction, H.B. Fuller intends to raise permanent financing through the private placement and syndicated bank loan markets.

The acquisition of the Forbo industrial adhesives business by H.B. Fuller has been approved by the Boards of Directors of both companies. Subject to customary closing conditions and regulatory approvals, the transaction is expected to close as soon as March 2012.

Morgan Stanley & Co. LLC is acting as H.B. Fuller's sole financial advisor in relation to this acquisition.

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