Huntsman has agreed to buy US-based speciality chemical manufacturer CVC Thermoset Specialities from Emerald Performance Materials for USD 300.00 million in cash.
Based on the purchase price, the transaction represents a multiple of around 10.0x the target’s adjusted earnings, before interest, taxes, depreciation and amortisation (EBITDA) for fiscal 2019.
The deal, which will strengthen the purchaser’s position in North America, is expected to complete by mid-2020, subject to customary closing conditions.
Huntsman plans to finance the acquisition with available liquidity.
CVC develops specialty chemical materials for customers in the composites, adhesives and coatings markets.
Its products include epoxy resins, toughening agents, accelerators and nitrile latexes.
The group also makes a range of applications such as Epalloy, which contain specialty epoxies that provide strong chemical resistance and help deliver a faster return for coated parts and substrates.
CVC operates two manufacturing facilities in Ohio and New Jersey and posts annual revenue of around USD 115.00 million.
Furthermore, the target generates EBITDA margins in excess of 25.0 per cent.
Peter Huntsman, chief executive of the buyer’s advanced materials division, said the deal would complement its portfolio and the addition of CVC’s technology will help make its offerings stronger and more durable.
The company also plans to use its existing footprint in Europe and Asia to grow the target’s product range worldwide.
Huntsman added: “In these uncertain times, our financial strength will allow us to keep looking for these types of acquisitions, while at the same time maintain a conservative balance sheet and opportunistically repurchase shares.”
Headquartered in Texas, the group manufactures differentiated chemical products for the transportation, homelife and construction segments, among others.
During the financial year ended 31st December 2019, Huntsman generated revenue of USD 6.80 billion, down 10.5 per cent from USD 7.60 billion in the preceding 12 months.
Within the same timeframe, the company posted adjusted EBITDA of USD 846.00 million (FY 2018: USD 1.16 billion).
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