STOCKHOLM, Sweden—Trelleborg A.B. and Ansell Ltd. are heading in two different directions when it comes to the production of protective gear and related products.
Ansell intends to expand that end of its business; Trelleborg wants to divest the only unit it operates that makes the products because, while it's a growing operation, it's not a core segment.
That's why Trelleborg Engineered Systems plans to sell its high-technology protective products business to Ansell for about $32 million. The transaction is expected to close in the second quarter.
Red Bank, N.J.-based Ansell and Trelleborg also reached a long-term agreement under which Trelleborg will supply polymer-coated fabrics to Ansell. The pact runs for five years, a Trelleborg spokeswoman said.
Trelleborg Protective Products employs about 170, has annual sales in the $25 million range, is based in Stockholm and operates a plant in Lithuania with sales offices in the U.S., Norway, Sweden, Dubai, Russia, Singapore and China.
The business fits well with Ansell's Specialty Markets and Industrial operations, Ansell CEO Magnus Nicolin said, and buying it follows the company's strategy to expand into selected areas of the protective products equipment sector.
Nicolin said Trelleborg Protective Products gives Ansell growth opportunities in targeted segments because it's “a leading organization in its field with strong brands and high-end products.” The business has complementary technologies, sales forces and distribution capabilities to those of Ansell, he said.
TPP produces high-end chemical protective suits, professional diving drysuits, escape hoods and tent/shelters for the first responder, military, medical, aerospace and industrial markets. Most feature polymer-coated fabrics. About two-thirds of its sales are in Europe.
The business has been profitable, said Peter Nilsson, president and CEO of Trelleborg, in an April 19 teleconference that dealt primarily with Trelleborg's financial results for the first quarter.
Trelleborg has been focusing more and more on its primary businesses during the last few years, shedding non-core operations whenever feasible and profitable.
The Stockholm-headquartered firm's core units in the protective products area are material development and the production of polymer-coated fabrics, according to Nilsson.
“Further development of the operation means that it will be farther away from our core competencies, and that is not good for the operation or for Trelleborg,” he said.
The company developed TPP “in a satisfactory manner and it now has the opportunity to continue to evolve with a new owner,” Nilsson said.
If the business were to remain within Trelleborg and continue to evolve, “the next steps in the operation would probably be too far away from Trelleborg's core competencies,” the spokeswoman said.
She said Trelleborg Sealing Solutions, which employs about 6,000 globally and had sales of almost $1.4 billion in 2011, will continue to focus on three prioritized areas: offshore and infrastructure construction, general industrial products and polymer-coated fabrics for advanced industrial applications.
Second key addition
The acquisition is Ansell's second key deal in the last five months.
In late November, the protective products manufacturer bought a minority interest in Chandler, Ariz.-based Yulex Corp. and signed an exclusive agreement with the firm that will give it a prime source for hypoallergenic rubber latex.
The pact calls for the global development, manufacturing and distribution rights for medical gloves, personal protection equipment gloves and condoms made from guayule rubber latex, an Ansell spokesman said at the time.
Ansell didn't disclose the size of the share it bought in Yulex, nor terms of the deal. Yulex produces biopolymers derived from guayule, a small desert shrub native to the southwestern U.S. and northern Mexico.
Obtaining exclusive manufacturing rights for some gloves and condoms, along with a minority interest in Yulex, probably will boost Ansell's product portfolio and extend the firm's reach, another company official said.
Nicolin said the pact with Yulex is an important step in Ansell's strategy to accelerate new product development while cutting the firm's use of natural rubber latex.