H B Fuller Company

Several major acquisition deals were reported across sectors this week. Workday soared 19% on a report that private equity firm Silver Lake is in talks to buy the software company. Diversified Energy is in advanced talks to acquire Elliott Investment Management-backed oil and gas company Birch Resources for more than $1.7 billion in cash. EQT Infrastructure offered to buy Cleanaway Waste Management in a deal that values the Australian listed firm at about A$6.9 billion, or $4.9 billion. H.B. Fuller said it received an unsolicited proposal from Ancora Holdings to buy its building adhesives solutions business for $1.1 billion to $1.2 billion in cash. Aurora Cannabis soared 21% after Curaleaf Holdings said it plans to make a $4 per share takeover bid, with Curaleaf rising 6.7%. H&R Real Estate Investment Trust agreed to be acquired by GO Residential Real Estate Investment Trust and a consortium including Blackstone, Crestpoint, PSP Investments and a company controlled by members of the family of H&R CEO Tom Hofstedter in a deal valued at about C$6.7 billion, including assumed debt. Israeli AI startup Decart is in advanced talks to be sold to a major tech firm for $6 billion to $7 billion. Jazz Pharmaceuticals announced it will acquire privately held Actio Biosciences for $820 million upfront and up to $500 million in potential milestones.

H.B. Fuller Company announced that shareholders of Advanced Medical Solutions Group plc approved its proposed acquisition of AMS at specially convened meetings held on August 12, 2026. The approval follows the agreement on the terms of a recommended cash acquisition previously announced by the companies on June 25, 2026. The transaction is expected to close by the end of the calendar year, subject to satisfaction or waiver of the remaining conditions set forth in the transaction documents. H.B. Fuller, the world's largest pureplay adhesives company, reported 2025 revenue of $3.5 billion.

H.B. Fuller has refinanced $420,000,000 of term loans and expanded its revolving credit facility to $800,000,000, extending maturities to 2031 and trimming interest margins. Despite the refinancing and a recent quarterly earnings beat, the company's 1-month share price return is down 11.94% and the 1-year total shareholder return is down 5.01%. The most followed narrative on H.B. Fuller points to a fair value of $73.29 versus the last close at $55.70, suggesting the stock could be 24% undervalued. The company is focused on maintaining pricing discipline and securing additional pricing gains, particularly in the HHC segment, which is expected to improve EBITDA margins as raw material cost pressures subside. However, H.B. Fuller still faces pressure from weaker demand in key segments and higher raw material costs, which could undermine the margin and earnings assumptions behind that valuation story.

H. B. Fuller shares have declined about 11% since its last earnings report, underperforming the S&P 500. For the second quarter of fiscal 2026 ended May 30, 2026, the company reported adjusted earnings of $1.41 per share, up 19% year over year and beating the Zacks Consensus Estimate of $1.37. Revenues reached $950.3 million, up around 6% year over year and surpassing the consensus estimate of $927 million, with organic growth of 2.6%. Adjusted EBITDA was $181 million, up 9% year over year, and the margin expanded to 19.1% from 18.4% a year ago. The company provided fiscal 2026 guidance for adjusted EBITDA of $650 million to $675 million and adjusted earnings per share of $4.60 to $4.90, while estimates have been trending upward since the release.

H.B. Fuller is advancing its specialty materials strategy through deeper medical market exposure, strong aerospace and electronics demand, and pricing actions that offset inflation. The proposed acquisition of Advanced Medical Solutions would expand its total addressable market by $15 billion to $95 billion and supports a goal of exceeding 20% adjusted EBITDA margin by 2028. In Engineering Adhesives, organic growth was roughly 5% excluding the solar exit, with aerospace up 30% and electronics and general industries posting double-digit gains. Pricing increased net revenues by 3% in the fiscal second quarter, helping lift adjusted gross margin 200 basis points to 34.2% and adjusted EBITDA 9% to $181 million. However, volume remains a constraint, with flexible packaging soft, automotive down mid-single digits, and management guiding for low- to mid-single-digit volume declines in the second half. Shares have lost 7.2% year-to-date against a 15.7% rise for the industry.

J.P. Morgan upgraded H.B. Fuller to Overweight from Neutral and raised its price target to $67 from $58, citing stronger-than-expected adjusted EBITDA growth. Analyst Jeffrey Zekauskas noted that price increases of 3% and positive currency effects of 3% lifted adjusted EBITDA by 9% in the second quarter and by 4% in the first half of 2026, even as volumes remained flat to lower. He raised his fiscal 2026 EBITDA estimate to $660 million from $646 million, up from $621 million in fiscal 2025, and expects volumes to be less weak in the second half than the company's guidance of a 4% to 6% decline. The analyst also pointed to cost-cutting from a smaller manufacturing footprint and likely lower raw material cost pressure in 2027 due to lower oil prices and the opening of the Strait of Hormuz.

U.S. adhesives manufacturer H.B. Fuller agreed to buy British medical supplier Advanced Medical Solutions in a cash deal valuing the company at around £715 million including debt. H.B. Fuller will pay 285 pence per share, a 35% premium to AMS's closing price on May 20, the day before the offer period began. AMS shares rose 15.9% to 278.16 pence on Thursday, their highest level since February 2023. The deal, expected to close by the end of 2026, is projected to generate around $55 million in annual run-rate synergies by 2031. AMS's board unanimously recommended the offer to shareholders.

H.B. Fuller raised the midpoint of its full-year adjusted EBITDA and adjusted EPS guidance after reporting second-quarter adjusted diluted earnings per share of $1.41, up 19% year-on-year. Net revenue reached $950 million, a 5.8% increase, with organic revenue up 2.6% driven by pricing execution. Adjusted EBITDA grew 9% to $181 million, and the adjusted gross margin expanded 200 basis points to 34.2%. The company also posted record second-quarter operating cash flow of $121 million and repurchased 750 thousand shares during the quarter.

H. B. Fuller has a positive Earnings ESP of +0.12% and a Zacks Rank #2, suggesting it may beat estimates again when it reports on June 24, 2026. The adhesives company has beaten consensus earnings per share in each of its last two quarters, with an average surprise of 2.51%. In the most recent quarter, it reported $0.57 per share versus a $0.56 estimate, and in the prior quarter it delivered $1.28 per share against a $1.24 consensus. Zacks research indicates that stocks with a positive Earnings ESP and a Zacks Rank of #3 or better produce a positive surprise nearly 70% of the time.