H.B. Fuller buys Advanced Medical Solutions for £659 million despite activist pushback

H.B. Fuller Co. agreed to acquire Advanced Medical Solutions Group Plc for 285 pence a share in cash, valuing the AIM-listed wound-care company at about £659 million, even as an activist shareholder urges the US adhesives maker to abandon the deal.

"The offer delivers attractive and certain value in cash to our shareholders," said Grahame Cook, chair of Advanced Medical Solutions.

The 285p-a-share price implies an enterprise value of approximately £715 million including debt, or about 12.9 times AMS's forecast 2026 earnings before interest, taxes, depreciation and amortization. H.B. Fuller expects roughly $55 million in combined run-rate revenue and cost savings by 2031, partly by stripping out AMS's public-company costs, and aims to return to its target leverage of 2.5 to three times net debt to EBITDA within two years.

The deal, which requires AMS shareholder approval and regulatory clearances, faces an unusual hurdle: Ancora Holdings, which owns more than 2% of H.B. Fuller, has launched a public campaign against the acquisition, calling it a "reckless pursuit" that would push leverage above four times net debt to EBITDA. H.B. Fuller faces a July 2 deadline under the UK Takeover Code to finalize the offer or walk away.

The acquisition marks a strategic push into medical adhesives for H.B. Fuller, a St. Paul, Minnesota-based company with a market capitalization of about $3.52 billion. Chief Executive Celeste Mastin described medical products as a key growth area, citing strong demand trends, regulatory barriers to entry and attractive margins. The deal would lift H.B. Fuller's addressable market by about $15 billion, according to the company.

AMS shares rose 16% to 278.14 pence in early London trading Thursday, reflecting the premium embedded in the 285p offer. The Cheshire-based company, which produces surgical dressings, tissue-healing adhesives and biosurgical products, had been in play since late April, when H.B. Fuller first confirmed its interest. A competing bid from private equity firm TA Associates fell through in May, sending AMS shares lower at the time.

Ancora's opposition adds a layer of uncertainty. The Cleveland-based activist, which runs a dedicated campaign website at SaveHBFuller.com, argues the acquisition would break a pledge management made on its March earnings call to pause dealmaking and pay down debt. It has threatened a proxy fight next year if the board does not change course. Total shareholder returns under Mastin have run at about minus 25%, Ancora noted, and buying a company at 11 to 12 times EBITDA while H.B. Fuller trades at roughly 7.5 times would only deepen the discount.

Deal Mechanics and Timeline

The acquisition will be carried out through H.B. Fuller Medical Adhesive Technologies Inc., a wholly owned subsidiary. All of AMS's directors, who collectively hold about 0.3% of the company's shares, are recommending shareholders accept the offer. The pre-synergy purchase multiple of 12.9 times forecast 2026 EBITDA falls to below eight times once the expected cost savings are factored in, according to H.B. Fuller's calculations.

The transaction is expected to be fully financed through committed funding. H.B. Fuller's shares closed 2.3% higher at $64.60 on Wednesday before slipping 2.9% in pre-market trading Thursday, suggesting some investor caution about the deal's reception. The US adhesives group has said it expects to return to its target leverage range within two years of closing.

For AMS shareholders, the 285p offer represents a full exit at a premium that the company's independent directors have deemed sufficient. For H.B. Fuller, the deal tests whether a specialty chemicals company can successfully bridge into regulated medical markets — and whether its management can overcome an activist campaign that shows no signs of abating. The July 2 deadline under the UK Takeover Code will determine whether this agreed deal becomes a binding one.

This article is for informational purposes only and does not constitute investment advice.