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Synthomer To Buy Eastman Chemical's Adhesive Resins Arm In $1 Bln Cash Deal

Synthomer Plc (SYNT.L) a global chemicals company, on Thursday said it has agreed to buy the adhesive resins business of Eastman Chemical Company (EMN), a manufacturer and seller of tackifying resins and additives, for $1 billion in cash. The latest transaction is scheduled to complete in first quarter of 2022.

Adhesive Technologies has been valued at $1 billion, on a cash and debt-free basis, with normal levels of working capital. With the latest acquisition, the acquirer sees to enhance shareholder value and expects the acquisition to deliver double digit earnings per share accretion in the first full financial year.

Financing of the acquisition and related fees and expenses from the gross proceeds of an equity placing is projected to raise about $275 million, existing cash and drawing under a new $300 million debt facility.

The acquirer also expects an attractive post-synergy multiple of 8.3x with target run-rate pre-tax cost synergies of c.$23 million per annum by the end of the third year, following completion of the acquisition.

Adhesive Technologies had posted an adjusted EBITDA of $77.3 million for the fiscal year 2020, said Synthomer.

Caroline Johnstone, Chair of Synthomer, commented: "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. Adhesive Technologies' global positioning, market leading technology with a strong focus on attractive end markets such as hygiene, packaging and high performance tyre additives are highly complementary to our existing business."

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