By Mary Page Bailey |
December 14, 2020
Trinseo (Berwyn,. Pa.) announced its entry into a binding agreement with Arkema S.A. (“Arkema”) to acquire Arkema’s polymethyl methacrylates (PMMA) and activated methyl methacrylates (MMA) businesses (together, referred to herein as the PMMA business). PMMA is a transparent and rigid plastic with a wide range of end uses, and is an attractive adjacent chemistry which complements Trinseo’s existing offerings across several end markets including automotive, building & construction, medical and consumer electronics.
“This acquisition will be a catalyst for portfolio transformation toward becoming a higher margin, less cyclical solutions provider,” said Frank Bozich, Trinseo President and Chief Executive Officer. “Arkema’s PMMA business has consistently delivered attractive margins with products serving many of Trinseo’s end markets. We believe this is an excellent first step in our portfolio transformation that is expected to
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Highly synergistic acquisition of Arkema’s PMMA business is the first step and a key catalyst in Trinseo’s portfolio transformation
Purchase price of €1.137 billion (approximately $1.36 billion); €1.037 billion (approximately $1.24 billion) including tax basis step-up of approximately €100 million ($120 million)
Implied purchase price of 6.2x enterprise value / 2020 estimated Adjusted EBITDA, including value of tax basis step-up, EBITDA adjustments for COVID-19 impact and annual run-rate cost synergies
Substantial run-rate cost synergies estimated to be approximately $50 million; future IT systems optimization is expected to generate additional $25 million in cost savings
Transaction is expected to be growth, margin and cash flow accretive and to reduce volatility
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