Synthomer to acquire Eastman’s adhesives business in $1bn deal

London – Synthomer plc has agreed to acquire the adhesive resins business of Eastman Chemical Co. for an enterprise value of $1 billion (€860 million).

The business develops, manufactures and sells tackifying resins and additives for adhesive products and will be integrated into Synthomer under a new ‘adhesive technologies division’, said the London-based group in a 28 Oct statement.

Adhesive Technologies’ operations consist of two business lines: hydrocarbon resins and non-hydrocarbon resins. 

Among other products, it manufactures Impera-branded pure monomer resins for the tire and rubber industry under its hydrocarbon resins business line.

The to-be-acquired unit posted sales of $566 million and adjusted earnings (EBITDA) of $77 million in 2020. 

The business operates six manfuacturing plants across the US, Europe and China. 

The three largest plants in Middelburg, the Netherlands; Jefferson, Pennsylvania and Longview, Texas are currently running ‘at high utilisation rates’ and have recently undergone expansion projects, Synthomer added.

The Middelburg and Jefferson plants manufacture PRM tire & rubber additives, according to the London group..

Synthomer said it will be partially financing the acquisition through a £200-million (€236 million) equity placing.

The acquisition, it added, will provide increased exposure to growing and sustainable end-markets such as hygiene, packaging and high performance tire additives. 

“These end markets are underpinned by a broad range of global megatrends that support long term growth,” said the London group.

Such megatrends include accelerating urbanisation, growing middle class and ageing population, increasing demand for sustainable and low-volatile organic compound solutions.

Furthermore, the move will be aligned with Synthomer’s strategy to further diversify its portfolio, end-markets and geographies. 

The transaction is expected to be completed in the first quarter of 2022.