H.B. Fuller Co. said Wednesday that it will acquire 95 percent of the Chinese firm Tonsan Adhesive Inc. for $230 million in cash, while four founding shareholders of Tonsan will retain 5 percent ownership.
Also Wednesday, the Vadnais Heights-based maker of adhesives, sealants and other chemical products met second-quarter adjusted earnings expectations of 78 cents a share. But revenue of $544 million fell slightly below the $545.2 million Wall Street was expecting.
In addition, Fuller lowered its full-year adjusted earnings outlook to $2.80 to $2.95 per share from the previous $3 to $3.15 per share. The new outlook is below the $3.07 per share Wall Street had been expecting.
Fuller said Tonsan is the largest independent engineering adhesives company in China, and that Fuller will benefit from Tonsan's customer relationships, manufacturing facilities and product development operations. Tonsan's annual revenue is about $100 million, Fuller said.
"Engineering adhesives make up approximately 30 percent of the global adhesives market, and the segment is expected to grow at rates significantly above the average for the adhesives industry," Fuller said in a statement.
The acquisition strengthens Fuller's business in China, said CEO Jim Owens in the statement. "This acquisition will launch H.B. Fuller into some of the most exciting and profitable segments of the adhesives industry."
The deal is expected to close in the fourth quarter.