Ansell Limited has announced the closing of its sexual wellness business to Humanwell Healthcare (Group) Co., Ltd. and CITIC Capital China Partners III, L.P. (the Buyer Consortium) for US$600 million (A$754 million).
The sale comes as part of the plan to shift the focus on the manufacturing of gloves and other protective gear for the manufacturing and health sectors.
Ansell has mentioned in their press release that all pre-completion conditions and regulatory approvals have been satisfied globally and sale proceeds received, with the exception of some pre-completion conditions relating to Ansell’s Brazilian condom business, Blowtex.
Despite the conditions being met, Ansell and the Buyer Consortium anticipated the need for additional time to conclude the sale of Blowtex and as agreed, so US$10 million of the sale proceeds will remain in escrow until the Brazilian completion conditions are satisfied, which is expected to occur by end of September 2017.
As previously announced the net after-tax cash proceeds to Ansell are expected to be US$529 million and the company also expects to realise a net profit after tax in the order of US$365 million subject to closing entries.
The sale represents the successful conclusion to the portfolio review announced in August 2016 with regards to the Sexual Wellness business and is now being followed up by the recently announced Sharper Focus Transformation program and US$265 million share buy-back.
In addition to this announcement Ansell also announced it has reached agreement with Raymond Limited, its joint venture partner in J. K. Ansell Private Limited in India, to restructure the Indian joint venture such that Raymond will take full ownership of the J. K. condom business including the Kama Sutra brand, while Ansell will have full ownership of the Indian medical business which sells medical gloves and hospital safety solutions in a separate legal entity.
The sale will result in a net payment to Ansell of approximately US$1 million. Closing is expected to be in the second half of the 2018 financial year.