Omnova Solutions has completed its acquisition of chemicals manufacturer Eliokem International from Axa Private Equity.
Omnova paid EUR227.5m for Eliokem, or approximately USD302m at current exchange rates, before subtracting Eliokem’s net debt and subject to working capital and capital expenditure adjustments.
The company expects the transaction to be neutral to slightly dilutive to earnings in 2011, but accretive in 2012.
In connection with the acquisition, the company issued USD250m in senior notes due 2018, replaced its existing USD150m term loan with a new USD200m term loan, and amended and extended its existing revolving credit facility.
"This combination creates a significantly enhanced, more diversified performance chemicals business that is well positioned to serve customers on a global basis," says Kevin McMullen, chairman and chief executive officer of Omnova Solutions. "It contributes to all three of our company’s strategic objectives by providing entry into several new higher growth markets, expanding our portfolio of value-added technology solutions and significantly broadening our global manufacturing footprint. Additionally, synergies are expected to provide savings in manufacturing, logistics, purchasing and SG&A by leveraging the resources of an integrated global team.”
