H.B. Fuller integration plan to generate $35 million in savings
H.B. Fuller Company has approved a plan associated with the integration of the Royal and H.B. Fuller businesses that is expected to result in $35 million in annual cost savings by 2020.
In addition to procurement savings, this plan includes savings resulting from closing two small production facilities and consolidating up to six other locations into three locations, and the reduction of certain positions to support manufacturing and SG&A cost savings. These actions are in line with the previously announced Royal integration and synergy plan, and are in addition to planned revenue synergies.
Fuller announced the acquisition of Royal Adhesives & Sealants, a manufacturer of specialty adhesives and sealants, in September 2017.
“We are passionate about being the best adhesives provider in the world, and our customers are benefiting from the broader portfolio and expanded development and production capabilities obtained in the Royal acquisition,” said Jim Owens, H.B. Fuller president and chief executive officer. “The integration of our two businesses continues to progress very well, and every day we gain more confidence in our ability to deliver the synergies that we committed. The actions we are announcing will further enhance our efficiency and enable us to deliver the 2020 target of $600 million in EBITDA and corresponding debt paydown.”
These actions will result in pre-tax charges of $35 million to $40 million with after-tax cash costs of between $20 million to $24 million over the next three years.
“The Royal integration is a three-year project that will be completed in the best interest of customers and employees with a clear focus on creating value for our customers,” continued Owens. “Our goal for the integration of our two great companies are prioritized to protect and grow our business, retain our best employees, deliver our committed synergies and build a unified culture. We are off to a great start, and the actions that we are undertaking will make H.B Fuller a better and stronger company.”
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
