ST. PAUL, Minn.—H.B. Fuller Co. signed an agreement to purchase Tonsan Adhesive Inc., a Chinese developer and manufacturer of engineering adhesives, for about $230 million.
The transaction is subject to customary closing conditions and regulatory approvals. H.B. Fuller said it is expected to closer in the fourth quarter of 2014.
H.B. Fuller also released its financial results for the second quarter ending May 31. Net income dropped about 21 percent to $20.5 million compared to 2013, while net revenue increased 4.8 percent to $544 million.
The firm said it will acquire 95 percent of Tonsan, and the four founding shareholders of Tonsan will remain with the firm as part of the leadership team and retain a minority equity interest.
“With this acquisition, we enter the fast-growing and profitable engineering adhesives market and strengthen our business in China,” said Jim Owens, H.B. Fuller president and CEO. “Together with Tonsan's management, we will grow in China and expand this business around the globe in ways that were not possible when Tonsan was an independent Chinese company.”
H.B. Fuller, a global adhesives provider that focuses on adhesives, sealants and other specialty chemiclal products, said engineering adhesives comprise about 30 percent of the global adhesives market and is expected to grow at rates significantly above the average for the adhesives industry.
Tonsan, according to H.B. Fuller, is the largest independent engineering adhesives provider in China. It offers silicone, epoxy, anaerobic and cyanoacrylate technologies that will facilitate H.B. Fuller's global entry into the segment.
Tonasan serves the transportation—automotive, rail and shipbuilding—market in addition to the machinery, photovoltaic, electronics and electrical industries.