Synthomer announced its $1 billion acquisition of Eastman’s Adhesive Resins business today, completing the company’s most significant strategic event from 2021.
The business will reportedly create a new Adhesive Technologies division for Synthomer, giving the group a leading position in the international adhesive market.
“The business is well-invested, with six manufacturing facilities, a highly skilled and experienced workforce and has a … strong innovation pipeline which will deliver meaningful revenue growth over the next few years,” said Synthomer Chief Executive Calum MacLean in a statement last October.
Synthomer said it expects the new division to bring in an earnings per share in the double-digits within its initial year, alongside annual pre-tax synergies predicted at $23 million at the close of its third year in operation.
The company highlighted its increased exposure to attractive high-end markets with strong gross domestic product (GDP) fundamentals.
Synthomer also noted that its expanded global presence and updated R&D facilities are set to give its portfolio greater scale and diversity.
The news followed the company’s strategy reported in its 2021 annual results, in which 99% of shareholders voted in favour of raising its borrowing restriction from £1.5 billion to £2 billion in order to accommodate the acquisition, with an extra £200 million equity placing at an Extraordinary General Meeting in December last year.
“Our Adhesive Technologies division adds a very exciting new growth dimension to Synthomer,” said Synthomer CEO Michael Willome.
“Its portfolio takes us into more specialised, more global and higher growth segments and as part of Synthomer, we are confident that we will be able to expand this part of our business significantly.”
“I would like to extend a warm welcome to our new Adhesive Technologies employees around the world.”
“I look forward to working together and realising the value potential that lies ahead.”
Synthomer shares were up 0.2% to 306.4p in early afternoon trading on Friday after the company made its announcement.