Eastman Chemical Company announced it and certain of its subsidiaries have entered into a definitive agreement to sell its adhesives resins assets and business to Synthomer plc for total cash consideration of $1 billion dollars.
The sale consists of hydrocarbon resins (including Eastman Impera tire resins), pure monomer resins, polyolefin polymers, rosins and dispersions, and oleochemical and fatty-acid based resins product lines. The business is currently part of Eastman’s Additives & Functional Products segment.
The total sale price represents a multiple of 11 times trailing twelve-month adjusted EBITDA of the adhesives resins business. The final purchase price is subject to working capital and other adjustments at closing. The company expects the sale to be neutral to adjusted earnings per share in 2022.
“Along with the divestiture of the tire additives business, this sale is part of our effort to improve the performance of the Additives & Functional Products segment,” said Mark Costa, Eastman’s Board Chair and Chief Executive Officer. “We are pleased to reach this agreement and that our adhesives resins business now has a clear path forward. We will continue to focus on leveraging our innovation-driven strategy to grow our specialty businesses within AFP and deliver strong earnings growth.”
“Alongside the diversification of our portfolio, end markets and geographies, our acquisition strategy looks to add new and highly complementary growth opportunities to Synthomer’s global portfolio,” said Calum MacLean, Chief Executive of Synthomer. “Acquiring Adhesive Resins delivers on that ambition, giving us a leading position in the growing global adhesives market and extending our portfolio of differentiated products and sustainable solutions. It is a business that we have long admired, and I am confident that the combination of Synthomer and Adhesive Resins will drive meaningful value for all stakeholders in the years ahead.”
The sale, subject to regulatory approvals and satisfaction of other customary closing conditions, including the consultation of certain employee representatives in the relevant jurisdictions, is expected to be completed in the first quarter of 2022. The agreement contains customary representations, warranties, and covenants of both parties including, among other things, to conduct the adhesives resins business in the ordinary course consistent with past practice.
Beginning in the fourth quarter of 2021 and until sale, the assets of the adhesives resins business will be reported as held for sale.
J.P. Morgan Securities LLC served as exclusive financial advisor, and Jones Day served as legal advisor to Eastman.