Avon Rubber - Reinvesting milk money in head protection

When the disposal of Avon’s dairy operations was announced, we assumed the proceeds would be reinvested in higher return businesses. The proposed $130m acquisition of the helmet systems activities of Team Wendy is a meaningful and strategically aligned deal, with higher returns and good organic growth prospects. Both deals should complete in Q1 FY21 and taken together should be EPS enhancing, improve value creation and leave net cash balances for further reinvestment.