Synthomer Acquires Eastman’s Adhesives Resins
Synthomer has agreed to buy Eastman Chemical’s adhesives resins business for $1 billion in a move that will position the UK chemicals company as the global leader in adhesives technologies.
The purchase includes Eastman’s Impera tire resins, pure monomer resins, polyolefin polymers, rosins and dispersions, and oleochemical and fatty acid-based resins product lines. It gives Synthomer three plants in the US, at Franklin, Virginia; Jefferson, Pennsylvania; and Longview, Texas; and three others in Middelburg, the Netherlands; Nanjing, China; and Uruapan, Mexico.
The business is currently part of Eastman's additives and functional products segment and generated revenue of $595.7 million in the 12 months to June 2021, with North America accounting for 48% of sales and Europe, the Middle East and Africa 35%.
“This acquisition is another important strategic step for Synthomer. It builds on the significant portfolio and geographic expansion gained from acquiring Omnova last year and adds an exciting new platform for growth,” said Synthomer chair Caroline Johnstone. “Adhesive Technologies' global positioning, market leading technology with a strong focus on attractive end markets such as hygiene, packaging and high-performance tire additives are highly complementary to our existing business.”
Synthomer is funding the acquisition from the gross proceeds of an equity placing, which it expects will raise about £200 million, along with existing cash and a new $300-million debt facility. Subject to approval by its shareholders and other customary conditions, the transaction is expected to close in the first quarter of 2022.
The London-headquartered group expects to realize annual run-rate pre-tax cost synergies of about $23 million by the end of the third year after the deal’s completion.
On Apr. 2, 2020, Synthomer closed its £654-million acquisition of US specialty chemicals and additives manufacturer Omnova Solutions, becoming a major global player in water-based polymer solutions. That purchase also boosted the British group’s presence in North America, as well increasing its footprint in Europe and Asia, further penetrating the high-growth Chinese market.
For Eastman, the deal with Synthomer, along with the sale of its tire additives business to One Rock Capital Partners for $800 million announced in June, is intended to improve the performance of its additives and functional products segment.
Author: Elaine Burridge, Freelance Journalist
