Synthomer (LSE:SYNT) PLC agreed to buy US-based Adhesive Technologies for £1bn (£728mln), adding customers in markets such as hygiene, packaging and high-performance tyre additives.
The FTSE 250 group has launched a placing to raise gross proceeds of approximately £200mln to help pay for the deal, along with existing cash and a new US$300m debt facility.
Adhesive Resins, which is being bought from Eastman Chemical Company (NYSE:EMN), develops, manufactures and sells tackifying resins and additives for adhesive products, with six manufacturing facilities and a strong R&D track record.
Synthomer (LSE:SYNT) said its end markets are “attractive” and its strong innovation pipeline is expected to deliver “meaningful revenue growth” over the next few years.
Calum MacLean, chief executive of Synthomer, said: “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.
“Adhesive Technologies 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.”
Approval will need to be sought by Synthomer’s shareholders for the deal and an increase of the borrowing to £2bn from £1.5bn.
Major shareholder KLK, which owns a 21.3% stake in Synthomer, supports the deal and has undertaken to subscribe for 9mln new shares in connection with the placing, to maintain its same holding.