business
H.B. Fuller deal beefs up electronics segment
- Article by: DEE DEPASS , Star Tribune
- Updated: September 11, 2012 - 9:21 PM
The acquisition of a Georgia company will help the adhesives giant cater to a growing market.
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Adhesives giant H.B. Fuller Co. has acquired a small electronics manufacturer in Georgia to help boost its fledgling electronics adhesives business, officials said Tuesday.
Fuller, based in Vadnais Heights, is best known for making the glues that go into diapers, magazines, books, paper towels and packaging. But a small part of Fuller makes adhesives that are part of circuit boards and other electronics found in cars, boats, acoustical equipment, and some cellphones and laptops.
Fuller hopes Norcross, Ga.-based Engent, which specializes in making microelectronic boards, will help it round out that business. Fuller plans to use Engent as an in-house electronics testing and research showroom, where customers will be invited to the company to work together on new product developments or to solve electronics problems.
"I am confident that the combined team will enable us to achieve our significant growth goals in this important market," said H.B. Fuller CEO Jim Owens in a prepared statement.
All 40 of Engent's employees will join H.B. Fuller, and no layoffs will result from the deal, said Fuller spokeswoman Kimberlee Sinclair. Fuller will also keep the Engent building in Georgia. Terms of the purchase were not disclosed.
Though Engent has just $10 million in annual sales, Fuller officials described the deal as a win-win. Less than 10 percent of Fuller's $1.6 billion in annual sales comes from the electronics market. Bringing Engent on board "should help us grow" that segment, Sinclair said.
Engent will expand Fuller's knowledge of microelectronic "assembly technologies" and help it tap new customers in the small-business, military, medical and large industrial sectors.
In return, Fuller's expertise will focus on helping electronics companies replace heavy screws and soldering with lightweight but strong adhesives.
Deutsche Bank analyst David Begleiter said Fuller's plan to use the acquisition to attract new customers with product partnerships is becoming more common among manufacturers.
"Most companies in the chemical-adhesives space do bring in customers and work with them on new products, generally," Begleiter said.
The acquisition is the latest in a series of moves by H.B. Fuller as it refocuses on its core business of adhesives and sealants.
The $1.6 billion adhesives giant recently sold its Latin American paints unit. And in December, Fuller agreed to pay $394 million for the large industrial adhesives unit of the Swiss-based Forbo Group. That deal, which closed in March, added about $580 million in annual sales.
In April, Fuller announced that it was restructuring as a result of Forbo purchase and planned to close six factories and slash 130 jobs in Illinois, Kansas, Oregon, Tennessee, Texas and Quebec.
The restructuring will finish by the end of the year and won't affect Fuller's 500 employees in Vadnais Heights and Fridley, Sinclair said. Fuller now has about 1,400 employees in North America and 14 factories.
Its stock closed Tuesday at $33.47, up 38 cents a share.
Dee DePass • 612-673-7725
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