Ansell Ltd. (ASX: ANN), an Australian global manufacturer of protective and medical gloves and condoms, said it agreed to sell its Sexual Wellness division, ranked as the world’s No. 2 condom maker, to a Chinese consortium comprising private equity fund CITIC Capital China Partners III LP and pharmaceuticals firm Humanwell Healthcare Group Co. Ltd. (SHA: 600079), for US$600 million.
The deal is subject to regulatory approvals, and is expected to close by the end of September 2017.
The Sexual Wellness division being divested includes all of Ansell’s condom, lubricant and devices business and manufacturing sites, with the exception of Ansell’s Medical and its J K Ansell joint venture in India.
The brands being sold include Ansell (Australia’s number 1 condom), LifeStyles, Skyn, Blowtex, KamaSutra, Manix and JissBon, which sounds like James Bond in Chinese. Ansell is reportedly the second-largest condom maker in China after Reckitt Benckiser.
In FY’16 the business operations being divested recorded revenue of $190 million and EBITDA of $38 million. The divested business units are based in Iselin, N.J.; Sao Paolo, Brazil; Brussels, Belgium; Paris, France; Krakow, Poland; Wuhan, China; Melbourne, Australia; Bangalore, India; and Bangkok & Surathani, Thailand.
Ansell will also retain ownership of its polyisoprene intellectual property and provide a fully paid-up license to the Chinese buyer consortium. Litigation against Reckitt Benckiser in Australia, the USA and the UK for infringement of Ansell’s patents relating to the technology behind the SKYN polyisoprene condom will be continued, Ansell said in a statement.
Ansell is a world leader in providing superior health and safety protection solutions that enhance human well-being. With operations in North America, Latin America/Caribbean, EMEA and Asia, Ansell employs nearly 15,000 people worldwide and holds leading positions in the personal protective equipment and medical gloves market, as well as in the sexual health and well-being category worldwide. Ansell operates in four main business segments: Industrial, Medical, Single Use and Sexual Wellness.
“We see Humanwell as a natural home for the business and wish them well with their purchase,” said Ansell CEO and Managing Director Magnus Nicolin. “Ansell will now turn its focus to the acceleration of the three B2B divisions while improving operating efficiencies further.”
The sale represents the end of an era for a century-old company, according to the Australian. The move comes as yet another restructuring of the business portfolio under the once mighty Ansell/Pacific Dunlop conglomerate, which had been linked to great industrial brands such as Dunlop, Olex Cables, Cochlear, Petersville Sleigh and Ansell.
Net after-tax cash proceeds to Ansell are expected to be approximately US$529 million. The company also expects to realize a net profit after tax in the order of US$365 million, which is expected to be recorded in FY’18.
Founded in 1993 and headquartered in China, Humanwell is a fully integrated healthcare solution provider engaged in research and development, manufacture and distribution of medical and pharmaceutical products in Asia Pacific, North America, Europe and Africa. The company is listed on the Shanghai Stock Exchange and has a market capitalization of US$3.9 billion.
CITIC Capital China Partners is a buyout fund managed by the private equity arm of CITIC Capital Holdings, which was founded in 2002, and has over $20 billion of assets under management. CITIC Group Corporation Ltd., formerly the China International Trust Investment Corporation, is a Chinese state-owned investment company founded in 1979 by Rong Yiren. CITIC is the biggest conglomerate in China. In 2016, CITIC Group ranked 156th among the Fortune Global 500, with annual revenue of $56 billion.
Goldman Sachs is acting as financial adviser to Ansell, with Gilbert & Tobin as its legal adviser.
Photo: Former Pacific Dunlop chief John Gough sitting at his desk in 1998. (The Australian)