Synthomer acquisition values Omnova at £654 million
Essex-based Synthomer plc, one of the world’s major suppliers of aqueous polymers, has agreed to buy Omnova Solutions Inc., which develops, manufactures and markets polymers, dispersions, elastomers and other speciality chemicals, at a price of US$10.15 per Omnova share. The acquisition values Omnova’s entire issued and to be issued share capital at US$473 million (approximately £375 million), with an implied enterprise value of US$824 million (approximately £654 million). The move is now subject to regulatory approval. This is expected to complete in the fourth quarter of 2019 or the first quarter of 2020.
Omnova is a diversified plastics and specialty chemicals supplier. Its products for the tyres segment include adhesives, under the Pliocord and GenFlo brands; elastomeric modifiers, and reinforcing resins. The company also supplies materials for a range of other automotive components, including belts and hoses; friction materials; cables and wiring; and cabin fixtures.
According to Synthomer, the purchase creates “a global speciality chemicals company with greater scale and a strong platform from which to invest in future growth.” The acquisition is seen as “a natural strategic fit with complementary chemistries and end market presence as well as materially strengthening Synthomer’s footprint in North America and increasing its presence in Europe and Asia.”
Commenting on the 3 July announcement, Calum MacLean, chief executive of Synthomer, said: “This transaction is an important step in the continued execution of Synthomer’s strategy with an acquisition that is both strategically and financially compelling. The acquisition of Omnova represents an attractive opportunity to materially expand our international business into North America and expand our presence in Europe and Asia, creating a global speciality chemical company.
!The Acquisition provides an attractive financial profile with significant expected synergy benefits. Synthomer has been disciplined waiting for the right opportunity to deliver value through our inorganic growth strategy and this acquisition will provide an additional platform for Synthomer to continue to grow into the medium term.”
Omnova CEO Anne Noonan said: “We are pleased that Synthomer recognizes the hard work of our employees in executing our multi-year transformation into a leading global specialty solutions provider. Omnova complements Synthomer culturally, geographically and by market, while Synthomer’s financial position provides for a very strong combined company that will be well positioned to accelerate growth.”