The transaction is expected to complete in late 2019 or early 2020, subject to approvals by Synthomer and Omnova shareholders as well as regulators.
The deal will create “a global speciality chemicals company with greater scale and a strong platform from which to invest in future growth,” said Synthomer’s 3 July announcement.
There is, it stated, “strong synergy potential” with target run-rate pre-tax cost synergies of $29.6 million per annum, three years after the acquisition.
The enlarged group, it added, “will benefit from excellent raw materials integration and Synthomer’s strong track record of safe conversion of hazardous feedstocks into water-based polymers.”
With 2018 sales of $769.8 million (€682.1 million) and earnings (EBITDA) of $86.3 million, Omnova employs around 1,900 people at 13 manufacturing sites across North America, Europe and Asia.
Some 44% of Omnova’s sales are generated in the refurbishment & new construction sector, the remainder in transport, industrial/other, oilfield, paper & packaging, personal hygiene markets.
Synthomer’s £1.6 billion annual sales profile is more evenly spread across the construction & coatings, health & protection, textile & adhesives, carpet & foam, paper and specialities sectors.
The UK company’s portfolio includes nitrile rubber and styrene butadiene rubber (SBR) lattices, high solids SBR elastomers, as well as speciality chemical additives and aqueous polymer dispersions.
The acquisition of Omnova represents “an attractive opportunity to materially expand our international business into North America,” said Calum MacLean, chief executive of Synthomer,
The deal, he added, will also “expand Synthomer’s presence in Europe and Asia, creating a global speciality chemical company.”
Synthomer intends to finance the acquisition through a rights issue of up to £204 million and drawings under new debt facilities.