The price of the all-cash transaction, which was due to close in early November, was up to $285 million, excluding customary working capital and other adjustments. 

Under the terms of the agreement, Huntsman was to receive approximately $257 million at closing and up to about $28 million of additional cash under an earnout within 18 months if the business achieves sales revenue in line with 2019.

“We have taken this business and built it from almost nothing to be a market leader in India. To take it to the next level of size and value, we simply do not have the footprint in India to do so,” said Huntsman chairman, president and CEO Peter Huntsman. “Pidilite is a respected leader in consumer adhesives within India and is in a better position to invest in and more aggressively grow this consumer DIY business over the coming years.  We anticipate within the coming months that we will be able to deploy the proceeds from this asset and replace the lost EBITDA with other growth assets that fit even better within our core Advanced Materials specialty business.”

The adhesives business sells well-known brands such as Araldite, Araldite Karpenter and Araseal in India. In addition to the Indian Sub-continent business, the deal includes a trademark license for countries in the Middle East, Africa and the 10 countries that make up the Association of Southeast Asian Nations (ASEAN).

Pidilite’s managing director, Bharat Puri, said the acquisition will “create significant shareholder value through strong revenue and cost synergies.”

Author: Elaine Burridge, Freelance Journalist