Advanced Medical Solutions Group’s shareholders have approved the planned sale of the company to H.B. Fuller for 715 million pounds. The approval clears a barrier to the completion of the deal, which H.B. Fuller expects to close by the end of the year. Buying AMS will bring H.B. Fuller into the markets for formulated biosurgicals and mechanical closures.
H.B. Fuller aims to complete the deal this year, with the acquisition of AMS furthering its goal of growing its medical earnings before interest tax, depreciation, and amortization to $100 million in the near term.
H.B. Fuller has identified medical as one of the most attractive end markets for its products. The company has been increasing its exposure to medical through both focused acquisitions and organic investment.
Aging populations and rising chronic conditions could drive sustained growth in demand for medical adhesives and sealants, leading H.B. Fuller to buy several companies in recent years, including Tissue Seal, Adhezion Biomedical, Medifill, and GEM.
Related: BD Completes Hernia Mesh Trial Enrollment
According to H.B. Fuller CEO Celeste Mastin, the medical market is fragmented and highly specialized, with meaningful barriers to entry, including regulatory approvals, clinical validation, and rigorous customer qualification. Mastin noted that the company has been intentional about increasing its exposure to medical over the last several years.
H.B. Fuller reported $68 million in medical adhesive sales last year, while AMS’ revenues were $302 million. The company calculates that medical sales will account for 10% of its business once the deal closes, adding a fourth growth driver to an organization currently reliant on adhesives for the building, engineering, and hygiene, health, and consumable markets.
Buying AMS will move H.B. Fuller into the markets for formulated biosurgicals and mechanical closures, while expanding its portfolio of surgical adhesives, tapes, and dressings. AMS’ portfolio of formulated biosurgicals includes antibiotic-coated collagens and bone scaffolding devices.
H.B. Fuller expects the deal to generate about $55 million in synergies, split between $20 million in commercial gains and $35 million in savings. The commercial synergies reflect cross-selling opportunities that H.B. Fuller expects to unlock once it gains access to AMS’ direct surgical sales force in Europe.
H.B. Fuller has identified the elimination of overlapping administrative activities as a way to cut costs. With the acquisition of AMS, the company is advancing toward the completion of a deal that will significantly expand its medical unit.
Related: Robotic microsurgery tested for Alzheimer’s treatment
As the deal nears completion, H.B. Fuller will focus on integrating AMS’ operations and leveraging its new capabilities to drive growth in the medical market. The company’s existing presence in the adhesives and sealants market, combined with AMS’ expertise in tissue-healing technologies, could create new opportunities for innovation and expansion.
H.B. Fuller received an unsolicited offer to sell the building unit this week, but the company’s focus remains on completing the AMS acquisition and expanding its medical presence. They expect the acquisition to close by the end of the year, pending final approvals and regulatory clearance.
It is a significant step.
The acquisition is expected to have a major impact on H.B. Fuller’s medical business, and they are well-positioned to capitalize on the growing demand for medical adhesives and sealants. H.B. Fuller’s CEO Celeste Mastin has stated that the company will continue to invest in its medical business, and the acquisition of AMS is a key part of this strategy.
