The Ansell Limited (ASX: ANN) share price is pushing higher on Thursday following the release of an acquisition announcement.
In morning trade the protection solutions company’s shares are up 1% to $32.80.
What did Ansell announce?
This morning Ansell announced the acquisition of 50% of the issued shares in Careplus (M) Sdn Bhd from Careplus Group Berhad.
The companies have agreed a total consideration of RM37 million (~US$9 million) including capital investments. This remains subject to Careplus Group shareholder approval and customary closing conditions.
Careplus (M) Sdn Bhd is a Malaysian manufacturer of surgical and latex and nitrile powder-free examination gloves. It currently has annual sales of RM157 million (~US$ 38 million).
It is a current Ansell supplier and has a manufacturing facility in the Senawang Industrial Estate, near Kuala Lumpur, with significant unused space and capacity.
Ansell expects the acquisition to close in March and be earnings per share neutral in FY 2020. After which, it is expected to be slightly earnings per share accretive.
The President of Ansell’s Healthcare Global Business Unit, Darryl Nazareth, spoke very positively on the deal.
He said: “Both Ansell and Careplus share similar values including our commitment to delivering high-quality products while maintaining high labour practice standards in our manufacturing facilities. We are excited to enter a manufacturing partnership with them, investing together behind additional capacity.”
“We continue to see excellent growth in our surgical business and this investment, together with additional capital investments we are making in our wholly owned manufacturing facilities, delivers the capacity we need to continue to grow and satisfy the increasing global demand for surgical gloves as well as support the rapid growth of our differentiated Industrial single use platforms,” he concluded.
The next event on the horizon for Ansell will be its half year results for FY 2020. It is scheduled to release these before the market on Tuesday February 18.
The post Ansell share price higher on acquisition news appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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