SYDNEY (From news reports) -- Kimberly-Clark will sell its personal protective equipment business to Ansell for US$640 million in cash, agreeing to a deal that the Australian company's chief executive said had been under consideration for years.

Ansell on Monday said it will acquire from Kimberly-Clark (KMB) a business that designs, markets and sells gloves, eyewear and other apparel under the Kimtech and KleenGuard brands. Kimtech products are targeted at the scientific market, while KleenGuard is sold to industrial users.

The deal comes as U.S. hospitals and healthcare buyers pivot back toward foreign-based buyers of personal protective equipment, after sales got a big boost during the early phase of the Covid-19 pandemic. Domestic mask producers, which had bulked up production over recent years in response to gummed supply chains and Covid-related demand, have been left with plants sitting idle, unfinished or operating below capacity.

The industry has also grappled with slack demand in recent years as laboratories, hospitals and clinics built up large stocks of gloves and other PPE equipment during the pandemic that they took time to run down.

Last month, Kimberly-Clark outlined plans to reorganize its business and overhaul its supply chain in a bid to rein in costs and streamline operations.

The maker of Kleenex tissues and Huggies diapers said it expected to book about US$1.5 billion in restructuring and reorganization charges over the next three years. It plans to reorganize into three businesses: North America, International Personal Care and International Family Care and Professional.

For Ansell, the deal represents an opportunity to double down on PPE and create savings through building a larger business, including in supply chains and organization. The Australian company already sells products to healthcare and industrial companies under brands that include TouchNTuff and HyFlex.

"For many years, we have assessed a combination with KCPPE as one of our most attractive acquisition opportunities and I'm delighted that we have now reached agreement," said Neil Salmon, Ansell's managing director and chief executive.

Ansell said that the transaction implied a valuation of the Kimberly-Clark PPE assets of 9.7 times earnings before interest and tax, ahead of any savings and tax benefits. It expects to close the deal between July and December.

Ansell said it will raise up to 465 million Australian dollars (US$306.0 million) to fund the acquisition and take on US$377 million in additional debt. The equity raising comprises a A$400 million fully underwritten placement of new shares to institutional investors, and up to A$65 million from a share-purchase plan.