ST. PAUL, Minn.—H.B. Fuller Co. has signed a definitive agreement to purchase Royal Adhesives & Sealants L.L.C. from its private equity owner American Securities L.L.C. for about $1.58 billion.
The firms reached the agreement on Sept. 4, subject to customary closing conditions. If approved, the pact brings about $650 million in revenue and $138 million in adjusted EBITDA to H.B. Fuller for fiscal year 2017.
H.B. Fuller CEO Jim Owens said on a Sept. 5 conference call that the deal is projected to close in October. The executive added that he does not envision the need for a full-scale consolidation effort, but it will drive efficiency and eliminate redundancy where needed.
"This acquisition creates immediate value for shareholders based on Royal's solid organic growth track record," Owens said. "This business fits perfect with our strategy to shift H.B. Fuller's portfolio toward engineering adhesives and other highly specified end markets."
Based in South Bend, Ind., Royal employs 1,500 people at 19 manufacturing sites in five countries with the bulk of its presence in North America. About 38 percent of its business, or $250 million in sales, comes from elastomer-based products, most prevalent in the construction and transportation segments.