Synthomer acquires Hexion Performance Adhesives & Coatings
Synthomer has announced the acquisition of Hexion Performance Adhesives & Coatings, a business of Hexion Inc., a global chemical company based in Columbus, Ohio in the USA.
The total consideration is EUR 201.6 million which is being funded from both existing cash resources and utilisation of additional credit facilities. The acquisition is expected to complete during the summer 2016 following receipt of regulatory approvals and satisfaction of other closing conditions.
Seven sites across Europe, the USA and Asia
Hexion PAC develops, manufactures and markets a wide array of dispersions, additives, powder coatings and speciality monomers, supplying a global customer base across a broad range of end-use including coatings, adhesives and for building and construction applications. The business employs approximately 750 employees and operates seven sites across Europe, the USA and Asia. In the year to 31 December 2015, Hexion PAC, generated sales of EUR330 million and EBITDA of EUR 26.7 million. At 31 December 2015, Hexion PAC had gross assets of EUR 132.9 million. It is expected that the acquisition will be earnings enhancing for Synthomer in the first full year. The existing leadership team of Hexion PAC will transfer with the business to Synthomer.
Offering access to new product technologies
The acquisition of Hexion PAC significantly strengthens Synthomer's position in the performance adhesives and coatings market, offering access to new product technologies, customers and markets. Hexion PAC is also highly complementary to Synthomer's existing business both geographically and in the markets in which it operates. Following completion, the Group will have a stronger platform from which to continue its growth aspirations in the Speciality Coatings market. Synthomer expects to achieve approximately EUR 10.7 million of annualised synergies by end 2018 through the integration of Hexion PAC's businesses into the Group. The estimated costs to achieve the synergies are EUR 8.0 million of restructuring costs and EUR 10.7 million of capital costs.
Calum MacLean, Chief Executive Officer of Synthomer, said: “The acquisition of Hexion PAC represents a further step forward in our strategy to continue to grow and develop the business. This acquisition strengthens our platform for continued growth in the global dispersions and additives market, and in particular expands our presence in the US and Asia.”
