Essity’s acquisition of BSN medical now closed
April 3, 2017 - Essity’s acquisition of BSN medical, a leading medical solutions company, has been closed. The company develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics. The purchase price for the shares amounts to EUR 1,400m and takeover of net debt to approximately EUR 1,340m1). Essity consolidates BSN medical as of April 3, 2017.
BSN medical’s sales for 2016 amounted to EUR 850m (SEK 8,038m) and adjusted EBITDA2) for 2016 was EUR 210m (SEK 1,986m). Organic sales, which excludes exchange rate effects, acquisitions and divestments, increased by 5.3%. BSN medical will be included in Essity’s Personal Care business area. Together with Essity’s business unit Incontinence Care, BSN medical will form the new business unit Health and Medical Solutions. This business unit will be led by Margareta Lehmann, currently President of Essity Incontinence Care.
“The BSN medical acquisition is an excellent strategic fit for Essity, supporting our vision to improve well-being through leading hygiene and health solutions, two closely interlinked areas. Our incontinence business, with the global leading TENA brand, shares similar positive market characteristics, customer and sales channels with BSN medical, which provide opportunities for accelerated growth through cross-selling,” says Magnus Groth, President and CEO, Essity.
“BSN medical, with well-known brands such as Leukoplast, Cutimed, JOBST, Delta Cast, Delta Lite and Actimove, has leading market positions in several attractive medical product categories and provides a new growth platform with future industry consolidation opportunities,” Magnus Groth, President and CEO, Essity, continues.
The acquisition is expected to realize annual synergies of at least EUR 30m with full effect three years after closing. Restructuring costs are expected to amount to a total of approximately EUR 10m to be incurred in the first three years following completion.
The BSN medical acquisition is expected to be accretive to Essity’s earnings per share from the first year. The company has high cash conversion and an asset-light business model.
The acquisition is fully debt-funded. Essity remains fully committed to retaining a solid investment grade rating.
1)Based on net debt as per December 31, 2016. Final takeover of net debt will be based on March 31, 2017.
2)Excluding items affecting comparability