H.B. Fuller to buy Forbo's adhesives business for $395 mln

H.B. Fuller said it agreed to buy Swiss firm Forbo's industrial adhesives business for $395 million in cash, as the specialty chemicals maker bulks up its presence in Europe.
Europe, India, Middle East and Africa together form the second-largest market after North America for H.B Fuller, while a little over half of Forbo's revenue came from Europe in 2010.
"Forbo's business brings a commercial base in Eastern Europe that fills a gap for us, and compliments our stronger position in the Middle East and Africa," Chief Executive Jim Owens said on a conference call with analysts.
Since March 2009, St Paul, Minnesota-based H.B. Fuller has acquired four adhesive makers. Adhesive and related products make up more than 85 percent of the company's sales.
Forbo's adhesive business will generate about $580 million in revenue this year, H.B. Fuller said.
H.B. Fuller, which focuses on adhesives, sealants, paints and other specialty chemical products, expects its revenue to grow organically at 5-8 percent per year, Jim Owens said. H.B Fuller's 2010 revenue was $1.36 billion.
H.B. Fuller has committed financing from banks and said it intends to raise permanent financing through private placement and syndicated bank loan markets.
Shares of the company, which have gained about 36 percent since touching a year-low of $16.92 in October, were trading down 3 percent at $22.95 on Thursday on the New York Stock Exchange.